All Forum Posts by: David Grabiner

Sounds great. I will be on the beach enjoying the fruits of my investments on that date but count me in for next month. 

Hi Brenna,

I would be happy to help you with your project if you can't find anyone closer to your area. I currently own 50 units which I self manage and also manage an additional 124 units, so I may fit your criteria. 

@Brian V. No school taxes, but there are county and city taxes. You can find the county taxes here: http://tpti.hamiltontn.gov/AppFolder/Trustee_Prope...

and City taxes here: http://www.chattanooga.gov/finance/treasury-divisi...

Not all properties are in the Chattanooga city so in that case you can just use the county site. 

I guess I am a little late to this setting goals party but I will throw mine out there now, better late than never.

1. Increase my network with other investors and lenders.

2. Purchase 42 units in 2018 ( I already closed on 20 units so 22 more to go!).

@Jeffrey Holst

This is what is so great about investing everyone has their own way to do their numbers and make assumptions. We use different strategies, and different loans to achieve our goals.  Allow me to mention how I think the numbers would be different for a new investor just starting out in the market. 

Purchase price 100K

Down payment 25% at 4.9% interest rate 30yr amort is likely what a new investor could get on a conventional loan. =25K

Closing costs = 3K

Gross rent = 1200 * 12 months = 14400

Taxes = 1500

Insurance = 650

Vacancy 5% = 720

Management 10% (really this can be higher when leasing fees are considered) = 1440

Maintenance 10% (I think it is better to have higher reserves especially when new) = 1440

Total cash flow = 3873

Cash on cash return = 3873/28000 = 13.83%

@Jeffrey Holst I think it all depends what is considered a good deal. Yes there are about 116 small multifamily properties listed on the MLS at this moment but how many of them are in decent neighborhoods and will give a true 20% cash on cash return? If someone is looking for 10% -12% cash on cash then yes those can be found easily, but in my experience there is a lot of competition for great deals.

@Chris Gordon Yes I am a full time investor here in Chattanooga. It is a great small town but it seems that over the last year or so the out-of-state investors have driven up the prices so great deals are more difficult to find. Now they can be found, but being a smaller market there aren't as many opportunities as in larger markets and the good ones get taken quickly or more often than not don't even hit the MLS before they are sold.

The market is too small to support turnkey providers and most management companies are not worth the money you pay them. This makes it hard to get great deals from out of town unless you have a good and trusted partner in Chattanooga, or a really great real estate agent. But if an agent is that great they are going to be listing agents and not a buyers agent. 

In the right market buying small multifamily properties with traditional 30 yr mortgages can return a true 20% cash on cash return after all expenses including management and Cap ex. This is without doing anything fancy like big rehabs, flips, or even BRRRRing. Just plain boring disciplined investing in the right market and buying at the right price in C+ to B type neighborhoods. So in theory if you had 300K in the right market you could hit your goal within a year. 

Hi David,

Welcome to the the BP community. I think Chattanooga is a great market to start out in, I'm sure you will be able to find something that meets your goals.

First let me say that you have gotten solid advice on here from some very experienced investors and I want to encourage by letting you know that loosing EM happens to a lot of us at some point. 

When I was a still a newbie I put an offer on a duplex and had an inspection period. Well I missed the deadline for the inspection period by a day or two because the home inspector got delayed. When I tried to get some repairs taken care of they refused and I lost my EM. It was around $1000 and it hurt at the time time, but I learned to valuable lessons. First, always keep the earnest money at the title company. Second, pay attention to the details in the contract and always meet the deadline.