All Forum Posts by: JT Spangler

 Yikes. I'd get out of there in a hurry if they're wanting 550k. Unless you think they're willing to come down a lot. 

Personally, I'd be tempted to either do as poster above suggested, and allow them to exit the lease if they forfeit SD and pay another month's rent (giving proper notice). Failing that, I'd also consider telling them that they are responsible for upholding the lease, which means they have to pay rent and utilities until you're able to get it rented. I'd also tell them that it's not a great time of year to rent a place, and I'd put finding a new tenant on them. Make them take the pictures, create the listing, and show the place. When they have interested applicants, they can apply with you, but you will NOT rent to them if they don't meet your written criteria. 

Alternatively, use it as a lesson learned and add a clause to your lease for what happens if a tenant wants to break a lease or sublet.

Clarksville is a hike. I think you'd get real tired of living that far away from Nashville, especially when it's a thin deal with serious concerns. 

I was up in Muncie over Thanksgiving, as well as Ft. Wayne and Anderson. There are some killer deals around there, looks like.

I would also ditch the dishwasher. I did a small kitchen in a basement recently, and I found a 16" single bowl sink that ended up looking great and left me with a lot more counter space. 

Coupla things: 

(1) Antioch isn't as hot as Nashville, but still pretty warm. There aren't a lot of GREAT deals around. There are good ones.

(2) You're putting down very little money, which means that you'll (a) be paying PMI (which cuts directly into your cashflow) and (b) while your cashflow is lower, your Cash on Cash returns are much higher. This is just as important a metric when evaluating, IMO. You have a limited amount of cash -- you want it to work as hard for you as it can.

(3) You're owner-occupying, which means you are living for free! To truly evaluate the property you need to run the numbers as if your unit was occupied, because that's money you will get (in fact, you're getting it when you live there in the form of free rent).

(4) Insurance providers vary wildly -- get several quotes. For a 4 unit, they'll be based on the value of the property, and it should be roughly 1k/year per 100k of value (cost to rebuild the house if it burns to the ground, not including the cost of the lot).

Charging exorbitant cleaning fees is likely illegal, and is certainly unethical. Proceed with caution.

 You're in a red hot market, and you have no experience and not much cash on hand. It's a tough spot to be in. You want to owner occupy so you can collect more doors for less skin, and that means you can't look in another market since you live in Austin. I think you have 2 options: keep scouring the market for a value add deal (an ugly house, something that needs a lot of cosmetic updates, is in a transitional area, or has a funky layout), or explore some options to add to your bankroll before buying anything.

I was in the same boat as you are a few years ago in an equally red hot market, and it took me nearly a year of looking before I found a deal I could afford and knew I could add value to. I bought it for 150k and two years later it's worth 230k or so. And it cashflows (thanks to appreciation I wasn't counting on and improvements I made).

Exit strategy is overwhelmingly used by investors to mean exit from a particular deal; not from investing entirely. Exchanging into another property certainly qualifies as an exit strategy, if you're actually reading what is written.

That's awesome! I've been following the tiny house blogs for nearly 8 years now.