Knoxville & Chattanooga Investing

[Danny Matthews]

Hello,

My wife and I are analyzing both the Knoxville and Chattanooga/North Georgia Markets, and are looking for some input from current investors.  Just to give you an idea of our background, we are CPA's located in Austin, Tx and currently have one property in the DFW area which for our goals has performed pretty well and is close to being paid off. But, with an increase of prices in the area (which I know is occurring everywhere) it's getting hard for it to make sense.  Which is why we are considering the Knoxville and Chattanooga areas, additionally I grew up in Knoxville and have a pretty good knowledge of the area.  

We're looking for pretty simple single family homes (3bd/2ba, no more than 1,900 sqft., single story) that rent out around $1,100 - 1,500/mo. in decent school.  Districts, is this reasonable given we're looking for homes all in cost of 110,000 - 160,000?  

Just to give you a little more on us, we're looking to use our rental property investments for cash flow, as we have a pretty good chunk of our current net worth in Qualified Investment accounts (IRA/401Ks) and would like to keep these primarily invested in equities for the long haul (20-30 years). So if we do it right we can use cash flow from our properties to protect against downturns in the market. Saying all this appreciation isn't a big concern as we'll hopefully get that from our other investments and just need our properties to cash flow. So in summary here's what we need to know:

1. Is Knoxville and/or Chattanooga/North Georgia good for Cash Flow properties

2. What's the economy look like in the areas (I have a general idea, but nothing compared to a seasoned investor)

3. Are good deals still in the areas, don't need a home run, just some singles and doubles would do. 

4. Anything peculiar about the areas that I should be considering. 

Sorry for the long windedness of this post, but wanted to provide enough detail so someone could understand where we are coming from. 

Thanks for any feedback in advance. 

[Matt Castle]

@Danny Matthews I can't speak for Chattanooga, although I hear it's doing well, but Knoxville has done very well over the last few years. Prices are up so your cash flow may be reduced, but it all depends on where and what you buy. 

Economy wise, even the radio ads are blasting job fairs and employers complain about finding quality labor with help wanted signs everywhere, so jobs are plentiful at this point. 

We have deals here, but they are becoming less frequent b/c homeowners/investors know they have an in-demand product. Knoxville does have a good supply of old inventory homes that could be flipped or rehabbed & rented. Let me know if you want more specific info and I'll try to oblige.