New Member Introductions
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 11 years ago, 08/17/2013
Semi-seasoned investor in Chattanooga, TN
Hello bigger pockets! My name is Jake, I'm located in NW GA/ Chattanooga, TN. I'm 32, married and have 2 children, ages 8 and 4. As of one year ago I am a licensed real estate agent, and I just recently quit my day job to work on real estate full time.
I began investing in real estate about 6 years ago when I couldn't sell my first house and decided to keep it and rent it out. A short time later I purchased a duplex using owner financing, and thus I was introduced to the world of alternative financing. I still have both of these properties today and they cash flow pretty well.
My real estate investing really took off a year and half ago, in the beginning of 2012. I had a friend that had been discussing investing in real estate with me for some time, and we both came up with enough money to purchase a nice triplex that had gone into foreclosure. We had enough money to purchase it and then have a small reserve fund, but that was it. I had met another guy about 6 months before this and he and I immediately hit it off. We had been bouncing business ideas off one another for some time, so I decided to pitch the idea to him of joining or real estate venture. He agreed, and with his funds we figured we could afford to close on the triplex and then purchase a duplex to go with it. We all agreed that we wouldn't touch the cash flow, just keep it in the account to go towards our next purchase.
This is where the story gets interesting (I promise!). One partner had worked for a guy that had sold his business recently. He happened to mention what we were doing, and this former-boss was very interested. He didn't want to invest his money in the stock market, didn't want to keep it in a CD, and didn't want to manage real estate, although he knew it was a great place to put his money. He proposed writing mortgages for us if we could find below-market deals that he felt comfortable with. He would write 15 year FIXED notes and only require us to put 10% down! We happened to find a builder that had over-leveraged himself and was losing a bunch of duplexes that he had built only 8 years earlier. Each unit was a 3/2 with about 1100 sqft, and the rents were $575 per unit. We were able to negotiate the price down to $66k, which meant we only had to put $6k down per duplex. We bought 8 of them and realized over 50% return on our cash the first year, not including the principal payments!
About 6 months ago we flipped our first house, a textbook deal that we bought for 61k, put 17k into and then sold in 2 weeks for 114k. Our mortgage-guy did 100% loan on the purchase price, we put up the rehab money and managed the project and he took a $5,000 "pre-payment penelty" on the note. We took those profits and purchased 8 more units that cash flow about $1,500 per month and put about $7k in the bank.
We currently have 27 units, cash flow $5k-$6k per month and are finishing our second flip this weekend. Our third flip is under contract and we will get started on it the first of September.
I came across BP from the podcast, I've loved listening to them as I drive around town! Keep up the good work, and I can't wait to learn from everyone here!
@Jake Kellerhals , welcome to BP! This is an amazing resource and is packed with great content. The podcast is superb and just the beginning to the wealth of information you will find here!
Congratulations with your REI thus far! It sounds like you have done very well. I appreciate you sharing your story as it is inspiring to someone like me with a similar start as yours (I turned my first home into a rental property and I am currently completing coursework to sit for the state real estate agent exam).
I am located in Northeast Alabama, about 60 miles from Chattanooga. If you are ever down this way or begin looking into Alabama, feel free to give me a shout. Again, welcome to BP!
Thanks Zac. I think you're making a good move getting your license, I only did it to be the agent on our deals, but it has turned into much more than that for me. I'm going to close on 20 properties my first year, and that was doing real estate part time. I was able to sock that money away and use it to help fund our flips. More than that though, it has kept me "in the loop" and given me great tools to get comps and other data. I'm licensed in TN and GA, but no plans to do so in AL. Perhaps one day I'll have a referral for you!
Hello Jake, Welcome to BP!
@Jake Kellerhals , thanks for the encouragement. My intentions were the same as yours for getting my license but I have since seen the greater potential as well. There are unlimited opportunities in real estate.
I look forward to seeing you around on BP and do keep in touch. It's great interacting with people close by! Best of luck!
I LOVE Chattanooga!! I don't see many investors on here from there. I grew up in Atlanta and went to MTSU for undergrad, so I was constantly driving through there. One of my best friends in the world lives there, and is a real estate agent there, and I have some other friends there as well. I also rowed competitively in Atlanta so I was always up on your river crewing around. It's so amazing there, I love it every time I go.And let's be honest, nothing is better than Becky's Shoes.
- Investor
- Maui, HI
- 3,944
- Votes |
- 13,324
- Posts
Hey @Jake Kellerhals welcome to the site! Your story is awesome, so thanks for sharing! Definitely jump in and start networking here. This is a great community of people who all want to help each other out, so definitely get plugged in. You may also wanna consider adding a photo! :)
Welcome @Jake Kellerhals , I'm fairly close to you (Knoxville area). You're right, Biggerpockets is the right place for real estate knowledge! It's awesome. Good luck.
@Brandon Turner , there ya go. Just listened to a podcast today that encouraged us to post a profile pic, so it was already on my list for tonight!
Hi @Jake Kellerhals, welcome. I am glad to see more and more people from down south on here lately.
I went to college in Chattanooga, worked in Knoxville for many years and still have a lot of family, friends and property in TN today. My spouse was a Hamilton County sheriffs deputy for several years, then went to Marion County Sheriffs dept. for several more years. Our roots run Deep in TN and we are planning a move to be home by Christmas.
Do you attend any local REIAs or investing clubs? I have just started to dip my toes into the market down there in anticipation of our pending transition back home. Looking forward to the sunshine again!