All Forum Posts by: Adrienne Green

@Nick Hulme smart idea to start investing out of state!  A few things here: why is the "best strategy long distance long term rental properties"?  It could be, it depends on a lot of factors: risk tolerance, goals, timeline, expertise, etc.  You don't dig in to those for you personally here, I'll assume you looked into those and determined that this was the best strategy for you personally.  (There are a lot of possible strategies, and they all are the 'best' for the right person!)

BRRR can be great, if you're going to do that, read David Greene's book on long distance real estate investing, and do what he says in terms of working with contractors. It is certainly challenging to oversee any rehab, after all you're getting more reward by taking on more risk. If you actually do what David Greene recommends, you greatly increase your chances of success.

In terms of markets, most on your list are ones I'd consider already pretty played out, expensive, with non-optimal rent/return ratios.  I think you want the NEXT Nashville, Austin, etc., you don't want to be buying into those now.  In fact, for both of those, I work with several investors who even live in those markets, and are investing here in Chattanooga instead.

I think you're right to focus in the southeast, I'd just move to smaller cities where there's still more opportunity!

@Sachin Soni welcome to the world of REI! I love that you've done your research, and you know your goals! That's key, and a lot of people don't do it.

If you're in CA, investing out of state is a smart move for a couple of key reasons: 1- CA is not landlord friendly with its laws; 2- since your goal is cashflow, CA isn't the market for that.

In terms of the markets you're looking at, I can speak to Memphis, Chattanooga, and Birmingham as all solid choices.  (I'm less familiar with El Paso, sorry!)  Memphis has a lot of C class investments at approachable price points and good cashflow.  Just keep in mind, they're C class.  I've heard Birmingham is solid for cashflow, I don't know the details.

Chattanooga is more of a hybrid market- a mix of cashflow and appreciation.  Your cashflow on Day 1 would likely look better in Memphis.  That being said, Chattanooga is growing fast, so you'd have some good looking appreciation and cashflow (due to rising rents) 1 year after purchase.  Chattanooga will also give you more investing options in A and B class locations.

TN is very landlord friendly, so that should be a plus for both Memphis and Chattanooga!

@Jim L. it sounds like long distance investing is a good fit for you!  I would second the recommendation for David Greene's book on it, as someone who invests long distance and helps others do so, I think a lot of people would avoid pitfalls by reading the book.

I would also say Zillow and Hemlane have rent estimate tools in terms of a LTR. You may also consider STRing the house, that way you could visit it periodically prior to the move. If you want to STR, I like Rabbu for rent estimates. Depending on the price point and type of house you're eyeing, it may be a better fit for an STR than a LTR as well. For example, in the Chattanooga market it's tough to get over $3k/month in rent. If someone can afford that, house prices are affordable here, so they'd just buy a place. So if you wanted a higher end house that would warrant a higher rent (and would require one to cover its costs), then STRing it may be a better fit.

The 1% rule is not likely to be met in an area where you'd want to retire, on the water.  In my market, and many others, you'll see that in more C class areas.  Also, the 1% rule doesn't take into account your costs, like taxes.  TN has low property taxes and other expenses, so you can cashflow on a property that is renting for well below the 1% rule.

I hope this helps!

@Jason Sousa Personally, if A and B class is your focus, I would say look more at Chattanooga and Knoxville. Those I know investing in Memphis are in C class neighborhoods.  Now I'm sure a Memphis agent will come on here and share all the A/B deals in Memphis, and I imagine there are some.  I'm just sharing what those I know are doing.

@Jason Sousa all 3 of these markets are solid places to invest!  I'd need to know more about you and your goals, risk tolerance, etc. in order to provide specific guidance.  What's your risk tolerance?  Are you looking at A, B, C class areas?  Looking to buy rent ready or value add?  Is appreciation a factor at all?  Are you going to self manage or use a property manager?  All of these factors go into what would be a "win" for you!

@Louis Louisius *I am not a lawyer* and based on what you're saying, it sounds like you'll use a second home/vacation home loan to get an STR? Often that's a conventional loan, requiring it to be in someone's personal name. If that's the case for you, I would recommend getting it on either your or your wife's name (assuming you can qualify with with income from only one of you), so that you're only taking up one conventional loan "slot" since Fannie Mae/Freddie Mac only allow 10 per person. Gives you more opportunity for future growth. Additionally, having one it in only one person's name keeps the other person completely separate from it, limiting your overall liability.

Some people will quitclaim it into an LLC a month after closing, to further limit your liability. Of course that runs the theoretical risk of triggering the due on sale clause. I have heard from many that actual exercising of that clause by mortgage lien holders is rare, do your own due diligence to determine what you're comfortable with.

Now, if you're instead getting a commercial loan such as a DSCR loan, if you can get it in an LLC from the get go, do that!

@Joe Solari that's awesome!  STRs can do well.  If you're looking close to you, @David Menapace is the guy to talk to!  He can help you buy in some areas, and he has a great co-hosting service as well.  If you're looking further afield, I'd be happy to discuss Chattanooga TN!

Congrats Wes! 

@Viraj P. great call looking at Chattanooga! It's a fabulous market for REI, with a lot of resources for long distance investors, as well as great fundamentals for continued growth and development. As a hybrid market, it offers a good mix of cashflow and appreciation.

@Matthew Ollis is a great insurance agent for your investments!

@Lindsey Wagner Congrats!  It is definitely doable to make your listing live ASAP after closing.  If you're keeping everything the same, you can have your agent ask the listing agent for permission to use the listing photos.  I use IGMS and PriceLabs in terms of systems.  IGMS works fine for me, others love whatever they use. 

The STR learning curve can be a lot at first. It's worth it, congratulations again!