East Chattanooga Investments

[Brian Boyd]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $550,000
Cash invested: $120,000

Bought 13 properties in East Chattanooga just outside of the gentrification zones and have all properties rented or about to be rented.

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

The ROI on the investments were too good to pass up with a 2% a month on many of the properties and at least 1% on the others.

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

We started calling real estate agents to see if they represented any investors looking to offload their properties in tranches. After a parsing through some hot air and overly inflated numbers, we started finding some good gems in a growing market.

How did you finance this deal?

A commercial loan with cross collateralization of the properties on a 5 year note with a 15 year amortization schedule.

How did you add value to the deal?

Structured the entity to hold it and did a lot of bird dogging, including viewing properties, drafting agreements, and representing the company in eviction proceedings.

What was the outcome?

Still have the properties and getting them stabilized.

Lessons learned? Challenges?

There are a lot of liars out there about their rent rolls, repairs made, and investments into the properties. Lesson learned was walk from a deal when you get a hint of something is not quite right. There are too many properties out there to buy, don't get bogged down on finding one property you think is perfect. Let the numbers do the talking.