All Forum Posts by: JT Spangler

 Your research isn't very good if that's what you found about Nashville.

Even your revised numbers are too liberal, in my opinion. You have a total of 10% for CapEx and maintenance, and with as high as the utilities are you're probably looking at needing to do quite a bit of both in the next five years. 

You can make money on this deal, but only if everything goes perfectly. I think when analyzing a property is not the time to be a wide eyed optimist. Consider this scenario: you buy this place, and in the first two months the boiler breaks and needs to be replaced and one of the inherited tenants moves out, leaving behind a unit that can't be rented without new paint and new flooring in at least half of the space (may as well do the whole space so it's consistent throughout, right?). Now you're on the hook for 15-20k and your gross rents are down by 25%. This is the sort of thing that can and will happen.

Man, I think us East Nashville guys need to meet up for a burger or a beverage and talk shop. 

 I don't. My vacancy rate in East Nash is very low, but as I said, without knowing where in West Nash and your tenant demographic it's impossible for me to guess at. I'd use 10% in your numbers and then see what it actually is. 4 bedrooms gets you into either renting to families or groups of 20-somethings, where 2 and 3 bedrooms you can attract young professionals. Upsides and downsides there. 

I like the extra income from the garages and the long term tenants, but I hate the utility costs. I think you need to offer quite a bit lower than 375k if it's gonna be workable. You're talking about putting a lot of your own cash into this, and 120k will buy you a lot elsewhere in the country. 

That's a terrible deal. If you expect rents of 1600/month, you should be looking for prices below 150k or so at a minimum, and that's for a cash flow rental (in other words, not an appreciation play where you lose money monthly but expect to sell at a large profit down the road). If you're looking somewhere with high taxes and HOA fees (like what you posted), you need the purchase price to be even lower.

West Nashville is a large and granular area, so I can't say what it should rent for. I'm in East Nashville, and if the house is in a good neighborhood and nice inside you can expect ~500/room. Very low vacancies. If it's not nice or not in a great area, you might see more like 300/room. If it's brand new and has upgraded interior (granite, stainless, etc -- a high end rehab), you might get more like 800/room. 

Best bet is to pull your own comps from what's out there on craigslist and rentometer and build your numbers from there.

I've also talked to B2R, and they do base financing on deal metrics and not investor DTI, but their portfolio loan product is a 5 year ARM with a minimum loan amount of 300k (75% max LTV so 400k in equity needed). They have another product for acquisitions that I'm considering, but the rate is a bit higher than I'd like (~7%). Good news there is that they'll loan down to 60k properties and 80% LTV for investment properties.

I've looked into visio lending before, and if I remember right their long term loans are ~8% (plus points) and 60% LTV. So, those are pretty big turnoffs, although potentially viable for the right deals.

So far I've only found a few that hold their loans, and I've been trading voicemails with the business loans people. No one that jumps out as a great investor option so far.