All Forum Posts by: Allen Tackett

Adrienne, My wife and I will be in Chattanooga in mid-May to look at real estate and check out the city. If you want to contact me with your top 1-2 investment recommendations, I'd love to review them. We are thinking about retiring in Chattanooga. I'd prefer an A-B area, newer construction, and a high rent-to-value ratio. I don't care what the price is. I was thinking about some of the new construction 3br townhomes around $500k downtown and would welcome your thoughts on those vs. a SFH in a suburb such as Ooltewah. We mostly just want a walkable neighborhood with lots of walking/hiking/biking trails nearby.

Hey Jim, great questions.  I can relate as the current market is expensive and high interest rates def don't help the numbers.  

To answer your question about comps: I use Zillow as my initial screen.  I use it in two ways.  First, I look at the rental Zestimate.  Second, I change my search to "To Rent" instead of "To Buy" and I look at what is actually on the market that is comparable.  I ask myself, if I were a renter, which property would I try to live in?  I think the key is to try to put yourself in your prospective tenant's shoes.  How can you add value to them?  Do you accept pets that apartment buildings won't?  Do you have more space?  Nicer finishes?  You get the idea.  I treat each one of my properties as a business and my tenants as my customers and I try to give them white-glove service.  After I have an idea of comps from Zillow, if I'm serious about the property and think it might work and I'm about to make an offer, I usually look at homes for rent on a few other sites.  Sometimes, if I don't feel confident in the data I've found, I'll call a property management company.  That's time consuming though if you're trying to screen 50 prospective properties, so I usually only do that for my top 1-2 picks.  Lastly, ask your realtor for their assessment.  I've found that Zillow and my realtors are almost always lower than what the market will actually pay.

As for where to retire and be close to water, Tennessee and Alabama have low taxes and lots of growth, so those would seem to be excellent options.  Regrettably, I don't have the perfect city or lake for you, but if you find it, please let me know!!  I'll come be your neighbor in a few years :)

Congrats Manny! Sounds like you're crushing it. Is your STR out of the area? Do you self manage from a distance or ?? How's your multi-family performing? I was under contract a few years back on a 4plex in Tallahassee, but walked based on the inspection. I tend to be pretty risk adverse and run away from run-down properties because I prefer to stay as passive as possible, but I admit there'd be a lot more opportunities out there if I could open my aperture a bit.

Most of my properties are SFH and TH; I only have a few duplexes and no 4+ units so I probably am not a great source of wisdom on that topic. I self manage everything and it seems like a lot of work to manage so many tenants so I think I'd only try MF with a good PM....When I run the numbers, it seems that you need huge margins or a lot of doors to generate enough cash flow to give up some margin back to a PM. Of course it all depends on the deal. Was yours turn-key, or did you do some value add/rehab?

 Thanks for the comment Nicholas.  I'm from Oregon, spent most of my adult life in Washington DC (and overseas all over), but am currently in Miami.

With 7 properties in three markets, what do you spend your time thinking about?  Are you planning to keeping buying this year despite some rumblings about decreasing prices?  Where do you get your information from?  I look at the news, Zillow, Neighborhood Scout and other sources, but I don't feel super confident in forecasting.  Maybe in the long run it doesn't really matter what happens in the next 1-2 years.  Where are you looking to buy?  

I'm at about a dozen properties in six markets.  I helped my mom buy a bunch more so we have a family portfolio at this point.  Mostly newer homes.  I haven't bought every year, but I try to buy at least one a year.  The things I'm spending a lot of time thinking about:

- Should I buy more properties over $500k that break even or have substandard yield (ie. 3% cash on cash) to take advantage of the tax losses on paper to offset my other passive income, while building equity in a nice home that's easy to rent out and more likely to appreciate?

- Should I forget about wealth building and appreciation and just go for the most passive cash flow?  I do worry about inflation and wonder if I should keep trying to increase my income.  Having a bunch of wealth locked up in an asset class with weak liquidity and high transaction costs has some real downsides.

- Should move my properties to one or more LLCs, despite the tax headaches and increased annual transaction costs, or is a large umbrella liability policy achieve the same thing?  How do you mitigate liability risks?

- FloodRisk shows some of my properties at elevated risk of flooding even though they are not in a flood zone.  Is it worth buying flood insurance anyway?  Old news stories show neighborhood flooding from 10-15 years ago, so there's a precedent.  How do you factor in flood risk?

- Some of the best cash flow deals are in neighborhoods with very high crime.  Is the higher yield really worth the headache?  Most of my properties are in A/B neighborhoods, but I do have 3 in higher crime areas.  No problems to-date, and contrary to popular opinion they have appreciated just as fast (or faster) than many of my "A" properties.  I'm still wary though of headache tenants and damage.  What has your experience been?

How would you invest $100k to $200k today for the highest passive returns? Would you hold and wait? Go for MF? SFH to appreciate? Max cash flow?

 Haha...fair, but it's probably a bit of both. I only have about a dozen properties, but it's a very nice portfolio with no lemons or cheap homes and it's given us financial independence.  I admit that I have learned that high standards, honest dealings and being a little demanding tend to improve the outcome of just about anything in life :)

I tried out the Pro version and am trying to reconcile their data with my experience.  Their crime numbers look awful for North Charleston, but I have tons of demand for my rentals and there’s substantial job growth, wage growth and income growth.


So is the data wrong?  Irrelevant?  Disproportionately concentrated in a few pockets?  Old?

Same for appreciation and depreciation.  NS is forecasting a 28% drop for Vancouver, WA over the next 3 years.  I find that hard to believe.

Many other markets seem to show a 3 year drop of 8-9%.  plausible, but doesn’t track with most news stories, Zillow data etc.  Supposedly NS uses CoreLogic data though, so I só perceive them to be credible.  Would love to hear about others’ experiences.  

Thanks for the useful, detailed and to the point overview of this market.  I wish I had this for every market. 

I'm interested in learning more.  Send me a DM and we can schedule a call for later this week if you'd like.

Greetings fellow investors,

I'm finding that the more experienced I get, and the larger my portfolio gets, I don't really have a good network of experienced investors to reach out to to exchange ideas and take things to the next level.  I'd be happy to share my thoughts and am looking for other folks who might be available once in an awhile for a quick phone call or email exchange.  Here's specifically what I'm looking for, and my core strengths:

Seeking

- Investors who owns multiple properties and have a few years of experience.  

 - Anyone who can help me expand beyond buy and hold long term rentals and see new opportunities in real estate

 - Anyone who can help me with deal flow (find new specific deals in a time-efficient way)

- Anyone with a net worth of significance who has thought hard about trusts, LLCs and taxes

Offering

- I own a portfolio of 10+ properties (all long term buy and hold) in several different markets, with a focus on passive cash flow. I usually buy 1-3 properties a year. SFH, TH and some duplexes.

- I have been doing this for 20 years

- I have other assets (equities etc.) and view investing through this lens: what's the best asset class right now and how do I want to balance and diversify my overall financial portfolio?  I previously owned a chain of coffee shops and have some experience buying and selling small businesses.  

- I'm happy to share some leads on specific properties that would be good investments, but I choose not to pursue for a variety of reasons.

Lastly, for all of the newer investors (or aspiring investors).  I'm almost always happy to give someone 15 minutes if you'd like to chat or get advice.  Just send me a DM.  I think it's important to give back to the community, and I probably could use some reverse mentoring as well.  I am not an agent and I don't have anything to sell so no agenda here if you reach out.

I'm happy to chat with you any time about this deal or other deals you're considering. Feel free to reach out with a direct message. My specialty is buy and hold for long term rentals. I can't help you with STR, MTR or flips. - Allen