Second Deal in Tenessee

[Bryan Escudero]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $108,000
Cash invested: $5,000

This was my second deal in TN. A small duplex outside of Jackson, TN. This is a cashflow play. I will most certainly be keeping an eye on the ROE on this one. It was a little difficult to rent, but the loan is low so I can cashflow it well.

$1,300 a month in rents
$165/Door
CoCr is 9%

What made you interested in investing in this type of deal?

Thanks to BP, I wanted to get into real estate. David Greene's book on Long Distance Real Estate Investing made me ore comfortable with investing outside of Florida.

How did you find this deal and how did you negotiate it?

I found this deal when I purchased my first deal as one of the comps. The rent to price ratio seemed good, so we underwrote it and executed the buy.

How did you finance this deal?

A local community bank.

How did you add value to the deal?

We have a renovation budget. We have bought new appliances, fixed some exterior issues and have our first tenant in there which jus about covers the PITI.

What was the outcome?

The property manager is still marketing it. Hoping to get the second tenant in so that we can cover the rest of the expenses. We don't need the cash flow right now, but will be happy once the property is fully leased up.

Lessons learned? Challenges?

I am treating the first two duplexes as "my first deal". They already gave me 7% appreciation before I closed and I am a long term hold investor. They also gave me the confidence to go into my next 2 deals.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with Patrick Rhodes in Tennessee. He is a great asset and a member of the BP community.