Understanding Nashville Sub markets better?

Question

Hi all,

I'm looking to find some apartment buildings to invest in the Nashville area.

From what I understand the following areas are hot now:

Gulch

West End

German Town

Williamson County

Does that match up with what you are seeing?

I've heard that East Nashville is catching fire now too, also is that what you are seeing?

Does Anyone Have thoughts on other market areas:

Airport

Antioch

Murfreesbro

Hickory

If I am interested in C+/B- Class buildings ~70% occupancy what areas would you suggest I start looking into?

Thanks for the help all of your advice has been awesome! Thanks Josh and Brandon,

scott

Steve Chaisson · Answer

@Scott Isley I would look in each of those areas.  There is an art to the perception of value that is consummate with knowledge and experience and extends beyond the numerical analysis.  I'd fly in and get a flavor of the city.  I sold an 8-plex in Hendersonville to my friend Brian Capossela with Cap Equity Realty in LA and he's done very well with it.  I'm happy to give a personal critique of anything you may come across.

Scott Isley · Answer

Thanks for the info @Wayne  Woodson !

Scott Isley · Answer

Thanks @Steve Chaisson I'm going to plan on coming out next month. I'll definitely give those areas some proper attention.  I'll keep that in mind!

Scott Isley · Answer

@Damien Shoemake Good advice Damien! I have it worked into my strategy to cover all expenditures, i'm going after the buildings :)

Scott Isley · Answer

@Chris Dozier excellent thanks.  will look into airport areas, mufreesebro, and parts of East nashville.  Great info

Scott Isley · Answer

@Steve Chaisson i'm looking at commercial ~8 unit+ C+/B- ~70% occupied.  Thanks for the advice, would you still recommend "parts of East Nashville are still a bit rough. Williamson County has very little multifamily property available.

Rutherford, Wilson, and Sumner Counties are strong." for those types of properties?

Damien Shoemake · Answer

@Scott Isley For Multi-Family Units, area # 2 seems to be the best in my view, in terms of appreciation and livability: That's mainly West Nashville with 37205, 37215, parts of 37209 plus 37212, 37204 & 37203... And then you have area # 6 which is mainly East Nash with 37206, 37216 and certain parts of 37207.

As far as buying actual apartment buildings, depending on how big & how many units you are referring to, you'd be hard pressed to find a good, full complex for sale, rather maybe look into multiple units for sale in an already existing complex.

After being in the Hotel business for awhile, I know that there are a lot more day-to-day maintenance and liability issues, management costs and other misc factors in running a big complex that could add alot more expense to your overall budget, slowly eating away at your bottom line… You may have to think about and budget for the following: pool, dumpsters, common grounds, insurance, exterior lighting, signage, landscaping, security, employees, etc... Your lender may also require a certain % of CapEx in reserves for the  building plus each unit and then you may also need to think about FF&E  (Furn, Fixtures & Equip)

It may be less of a hassle to own several units in 1 complex and just pay the building fund and/or HOA fee and let the owners deal with the rest of the complex. And your insurance will be much cheaper as well, you will typically only need to cover from drywall in. The HOA’s should cover things like roof, grounds, exterior insurance, termite, water, pool, etc…

The Pro of owning the whole building would be the upside in appreciation down the road if bought in the right area. The Con is that you might not be able to sell it as quickly as you could your units piecemeal. Just some points for you to think about.

Steve Chaisson · Answer

Bellevue is doing well.  A lot of flood properties from 2010 have been reabsorbed into the market.  It's a great starter home market for those who want more bang for their buck than coming into west Nashville.  I'd watch condo purchases but some of them can be great rentals.

Steve Trent · Answer

Great info from all responders. Do any of you have thoughts on Belleview?  How is it trending.

Chris Dozier · Answer

Scott,

Most areas of Nashville have good deals in them.  All comments here are accurate - there are good and not so good parts of Antioch, but I know several investors with successful properties all over Antioch. I would certainly consider property there.  Because of what some have said here, they are a great value.

Gulch - Mostly new condo activity.

West End - Great area - higher end properties, depending on what part

German Town - Lots of new construction, but plenty of opportunity.  Great downtown location

Williamson County - Do your due diligence.  One of the most affluent counties in the US.  There are deals to be had, but purchase prices are high.

East Nashville - As Matthew said, many investors in that area.

Airport Area - Antioch, Hermitage, Donelson - all decent areas

Murfreesboro - Largest university in Tennessee located there along with a vibrant job market.  La Vergne and Smyrna are other areas to consider.

The Old Hickory area is good as well. Just east of Hermitage and the airport.

Chris Dozier

Understanding Nashville Sub markets better?

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