All Forum Posts by: David Freestate

I second Darin and Shawn- I've lived in all three, and it depends on your personal preference. If you prefer the quiet small town feel and want to be closer to the mountains, Maryville is a good option- it also has an excellent school system and is about 25-30 minutes from Knoxville. Alcoa probably doesn't have many houses in that range, but it also has good schools & is right next to Maryville. If you'd like a waterfront house, you could probably find good ones for that price in west Knoxville and Louisville. And if you prefer the convenience of a bigger city (shopping, performances, museums, etc.), west Knoxville and the Farragut area have that plus an excellent school system. As Darin mentioned, there are also historic houses near the central part of the city, and the Sequoyah Hills neighborhood is also where a lot of people tend to buy higher end houses. If you like downtown living, there are probably some large apartments you can buy that are right in the middle of everything in the Gay St. or Market Square area.

I agree 100% with Jason Mcdaniel . I also went to middle school & high school in Maryville, and it's really hard to go wrong anywhere there- lots of jobs, quick access to Knoxville, and the city's school district has some of the best public schools in the region. A lot of the new growth I've seen in the last decade or two has been on the west side of town- lots of new restaurants & retail toward the northwest, manufacturing to the west, & restaurants and retail to the southwest. Northeast Maryville along E Broadway tends to have smaller, older houses- I worked there in high school (I'm riding through there right now, actually), and it's a little more sketchy than the rest of town (I saw some drug deals & petty crime around there), but not too bad by national standards. Eagleton Village is along there, and it's not bad- some of our relatives live there, and it's a quiet working class area. Alcoa has some areas I tend to stay away from, particularly toward the north, but probably not to the point of being war zones or anything. If you google Lexis Nexis Crime Map and look at a map of crimes in the past 3 months, it gives a pretty good idea of what the different parts of town are like. Great to hear from another Texan- I'm a native of San Antonio myself. If you have any other questions about the Maryville/Alcoa area, feel free to message me.

Hi Jordan, welcome to the forums! That's a beautiful area of the country- I used to drive there a lot going to JMU. I'm not sure how far you'd be willing to move- the Tri-Cities area has multi-family & is close to Abingdon, although the economy there doesn't look great. Knoxville is about 1.5 hrs further and has a diversified economy with good employment figures. If it were me, I'd probably move to where the deals are- especially TX, TN, or FL (no state income taxes). I know that can be easier said than done, depending on your family situation.

@Meghan McCallum Sounds like a cool idea! Someday I'd also like to run the numbers & see if adding solar panels could fit my business plan. For your property, all I can think of offhand are photosensors for outdoor LED lighting and solar water heaters, aside from the obvious (solar panels, good insulation, energy efficient appliances, etc.)- I'm sure your energy audit will turn up a lot more than that. The National Renewable Energy Lab makes free software called SAM that you can use to estimate performance & savings of solar panels- their download link is here (https://sam.nrel.gov/download), and they have instructional videos here (https://sam.nrel.gov/webinars).

@Stephen Adams Hi Stephen- thanks for sharing! I'm in the learning stages too, so don't pay too much credence to anything I have to say :-).

That being said, I'd be a little nervous about the vacancies- if you buy on actuals using 20% down, that's $31.2k/year gross minus $21k/yr (rough & conservative estimate using 50% rule-of-thumb on $42k gross at full occupancy, since you'll still need landscaping, garbage service, etc.) minus $10.8k/year debt (conservatively using 5%), which would put you at -$50/month right out of the gate.

I'd probably want to see a rent roll and trailing 12mo P&L- I'd also want to know how long those two units have been vacant, and would try to find what the reason is (whether you happened to catch them when 2 tenants moved out, or whether there's a bigger underlying problem). Phillip had a great point, I'd also want to break down the individual expenses to get a more confident estimate (if you haven't seen it, Brandon did a great YouTube video on estimating expenses & cash flow with BP's Rental Property Calculator, called "How I Quickly Analyze a Rental Property for Cash Flow"). Also, in Jake & Gino's first podcast, it was mentioned that some banks use $3,200 yearly expenses per unit in their underwriting; I don't know if that's still the case (if anyone knows from experience, I'd be interested to hear from you), but that would bring expenses up to $25.6k/year and put you at -$433/month starting out.

Depending on your risk tolerance, it sounds like there could be upside if you fill the vacancies, raise rents, and there aren't significant capital expenditures needed soon- I'm more risk averse though, so personally I'd probably pass in favor of something that provides the minimum return I'm looking for from month one.

@Christopher B. Great idea- looks like an interesting project! Great to see people improving the community and breathing new life into old houses.

It's great to see people talking about solar- I haven't run the numbers yet, but may look into it when I buy my first building. The National Renewable Energy Lab has free software called SAM (https://sam.nrel.gov/download) that you can use to calculate expected energy generation based on the module/inverter models, location, system orientation, etc.- it can also calculate financial return based on system costs/labor, incentives, local utility rates, etc.