All Forum Posts by: Jack Tucker

@John Ivicevic You are right, Memphis is a bit saturated. Not sure if you wanted to check out Athens Georgia opportunities. I'm biased, but if you are into turnkey, there are some good options.

Best of luck

To answer you questions, I have seen the multiplexes on both Vine as well as Highland park. From a cashflow perspective, they look awesome on paper. I will tell you that the properties on Highland Park a number of years ago would sell around 300-250k, but they dropped like a rock because the neighborhood demographics shifted the wrong way. Vacancies and turn-over in that area hurt those owners. There is drug and other questionable activity at both Highland park and the Iron Triangle area (Vine) which has greatly diminished values. My good friend on the Athens Police Department refuses to drive in there without at least 2 squad cars. I hate to be so negative, but there are reasons the numbers are so attractive. The class of tenant that you must deal with (the good ones run for their lives and the multiple bad ones must be constantly evicted) makes your first MF and/or absentee landlording experience VERY difficult. This is for the hardcore veteran that is still willing to fight to make the numbers work. There are many other better options in town.

After all that negativity, I will say that Vine is on a better trajectory than HP. There are some investors that have purchased cheaply, knocked-down and built new in that area since downtown is very close. If you can stay on the "downtown" side of Vine St, then it's not as bad. As you drive away from downtown, it gets rapidly worse.

I do a lot of contract serve work with Habitat for Humanity in that specific area. The Director, a good friend and soon-to-be investment partner, told me that their strategy is that they are trying to stamp out the drug activity by literally disrupting the drug routes (physical backwoods trails) by building and monitoring full communities in strategic locations over there. Very smart and it seems to be working.

I'd be happy to see them in person, since these generalizations may be too harsh versus the actual situation on the ground. Just let me know if you want to talk or meet. I'm an engineer (ie NOT A REALTOR OR INTERESTED IN MAKING MONEY OFF THIS) and travel quite a bit myself. I hope that I can be helpful bringing you into the best possible and most profitable Athens situation.

Jack

Have I bought 2% returning rentals? Short answer: Yes.

Long answer: It's not just about the cash flow... What kind of equity position would you be in now? Over time? Could you upgrade the property to improve rents / reduce maintenance / reduce vacancies / and even enhance equity during your hold period?

Look at it as a possible hybrid to consider the best of both worlds - hold for cashflow now - and flip down the road if you are bullish (but only because you have solid data) about the trajectory of the local property values.

Of course, don't forget to list out the Opportunity Costs, based on other options that are known... or just staying liquid or at least poised to jump on the next opportunity. The devil is always in the details.

This discussion turned into a 1031 topic... I still am unsatisfied that one expert "recommends" 12 months while another says this is a blatant violation... Oh well. I guess the grey area promotes blogs and forums with differring opinions. And you know what they say about opinions.

Back to the original question... I'd hate to miss this opportunity based on the member feedback. I've posted this in the marketplace to either wholesale or find a cash partner. What kind of HML might take on this project?

@Bobby C.

I tried responding back a couple of times via private messages, but I'm not sure if I was successful. Since we are both local, we should get together sometime to discuss some of your findings so that I can provide more specific feedback on parts of town.

Thanks,

Jack

Since I own some of these free and clear, I've been approached by perspective buyers that want me to do owner financing. I'm not wild about this idea since I'm trying to liberate the equity into cash for other projects, but it's hard o ignore a full price ofer.

What are reasonable terms to offer another investor with a decent (675-750)beacon score that already has 4 conventional mortgages? How much down? how much interest? 35 month balloon? I dont want to tie up my equity for long term. Thanks!

The property has great bones already, but spending some money will help bring a strong price and min days on market.

In addition, there is a spreadsheet that shows the hard contractor quotes as well as a padded budget that I took the liberty of calculating given my conservative nature. Please let me know within 24 hours if you have any interest to learn more. Also, please indicate if you are interested in buying the wholesale contract or want to partner if you wish to fund the project. I live 5 minutes from the property and have my contractor ready to go. Thanks, Jack Tucker

Here's the description:

Charming 1940's cape cod farmhouse located in Watkinsville! Includes substantial 2006 addition. Over 3400 square feet, this home has lots of space with large rooms, a kitchen with lots of storage space and stainless steel appliances, and 4 large bedrooms and 4.5 bathrooms! Interior floors are hardwood, tile and carpet, and living room features a brick fireplace with mantle. There is a formal dining room off kitchen with french doors. Exterior features include a covered front porch for rocking chairs,upper and lower deck on the back! Garage offers additonal storage and parking.

... With an exiernal email address, I could send you the spreadsheet that shows repairs, etc.

2 choices:

1. This could either be a wholesale deal... or

2. if I could find a CASH partner, I'd run this flip myself since the numbers are so solid.

Contact me for info. Hard quotes provided by contractors and subs. 90 day target for Spring market. ARV provided by investor-specialist local Realtor. Great location. Near University of Georgia and Athens GA.

Thanks,

Jack

North Peter is hit and miss with some revitalization, but there are a number of properties on Peter/Vine/Arch that are on the bubble of the knock-down caliber. Buying a newer property (and the new construction ones are obvious) is a reasonably safe investment since improvements continue. Not sure if you have seen the typical pedestrian traffic in these parts... as a safety note. Just in case you have a family or would ever consider a family there.

Gaines School... Some invstors are ok with the east side because of the access to campus and shopping... I've seen some good and bad. I am very familiar with prices and rents on that side of town, but own absolutely nothing over there as a matter of personal preference. I've seen rentals on that side of town suffer during the economic downturn. Also, the public school quality is very very poor, so you are looking at UGA student housing or bust. The other areas I mentioned serve multiple interested tenant markets (students PLUS grads, young pros, nurses/medical staff etc). The latter make for much better quality tenants, which is probably the number one success factor in YOUR satisfaction and financial outcomes of your future landlording experience.