All Forum Posts by: David Hanson

 Thank you for your valuable insights and feedback! I greatly appreciate your experience with a multi-family property and the factors you considered. Return on Investment, location, and risk analysis are all critical factors in evaluating potential investments. I agree with your emphasis on long-term performance, attracting responsible tenants, and mitigating risks. Your insights provide valuable guidance for other investors. Thank you again for sharing your knowledge!

Would love to hear from other investors. All locations welcome. Looking to better understand if there is something specific that you post the most emphasis on? Is location the most important, is it the CASH on CASH return, the monthly cashflow, or is it the depreciation? 

Personally

When evaluating a potential investment property, I consider several key factors to ensure it aligns with my investment goals and offers a solid return on investment. These factors include:

1. #1 Location: The location of a property plays a crucial role in its investment potential. I look for properties in areas with strong economic growth, low crime rates, good school districts, proximity to amenities, and positive population trends. A desirable location often translates to higher demand and potential for appreciation.
2. #2 Market Analysis: Conducting a thorough market analysis helps me understand the local real estate market dynamics. I analyze historical and current market trends, supply and demand dynamics, rental rates, vacancy rates, and property appreciation rates. This analysis helps me gauge the potential for rental income and property value appreciation.
3. #5 Property Condition: Assessing the property's condition is vital. I consider both the property's present state and its potential after necessary repairs or renovations. Understanding the cost and feasibility of any required improvements allows me to estimate the overall investment costs accurately.
4. #3 Cash Flow and Cap Rate: I carefully evaluate the property's potential cash flow and cap rate. Cash flow is determined by considering factors such as rental income, expenses (including mortgage payments, property management fees, taxes, insurance, maintenance costs), and vacancy rates. The cap rate provides an indication of the property's income-producing potential relative to its purchase price.
5. #4 Financing Options: I explore various financing options available to me, considering factors such as interest rates, loan terms, down payment requirements, and the impact on cash flow. Understanding the financing options allows me to assess the feasibility and profitability of the investment.
6. #6 Exit Strategy: Having a clear exit strategy is crucial. I consider factors such as the potential for future appreciation, market conditions, and the property's potential for resale or refinancing. This ensures that I have a well-defined plan in place to optimize returns when the time comes to sell or refinance the property.

By thoroughly evaluating these factors and conducting due diligence, I can make informed investment decisions that mitigate risks and maximize the potential for long-term financial gains.

 I am putting a possible investment under contract today in Cleveland and would love to meet up and chat. I own a few investments in the Ooltewah / Chattanooga area. This will be my first in Cleveland. 

 I am local and happy to meetup anytime to talk strategies and connections. 

 Please @Adrienne Green let me know when you do this again. I was out of town, but would love to attend the next meetup. 

 August 25 2009. Just completed Trump institute for Investing in Real Estate they used to travel the country and do free conventions followed up by further information and coaching for a fee. I was 23 at the time I had already taken the State Real Estate course at 18 years old but never got my license. 

Had the education and purchased my first House Hack 1 mile from University of Maryland. I had to look at 50 homes before finding the right one. This area is build on natural ground springs and all of the homes have 1-2 sump pumps in the basements. So if power goes out flooding occurs. One of the first upgrades was battery backup sump pumps with audible alarms.  I lived in basement and rented out upstairs 3 bedrooms lease/bedroom. Mortgage was $2600/mo and I was paying $180 of that. 2nd year I was profiting. I put the profits back into upgrades each year I owned it and raised the rent every year. Owned it for 9 years and when I sold it rent was $3600/mo and mortgage after refi was $1600/mo. Sold and netted $100k profit. Terrific first experience in the investing world. I now live in Chattanooga TN and I specialize in helping investors meet and exceed their financial goals while continuing to build out my portfolio/retirement plan. 

CASH out refi and DSCR both good options.

There is a new product called the All in One Loan that I recommend you take a look at. Imagine a first lien position Line of Credit on your rental instead of a traditional mortgage. The benefits are similar/same as a traditional mortgage plus so much more. 

Traditional financing you have a set amortization schedule for the life of the loan. Heavy interest payments and small principal payments on the front end. 

With this loan you can setup your rent payments to go directly into your line of credit account there fore paying down principal as an extremely accelerated pace. The loan has unlimited recasting so you only owe interest on outstanding borrowed amount saving you thousands in interest. And if you ever need to pull money back out for same project or even another investment you just pull it out and loan adjusts with no fees or penalties. 

If you would like me to put you in touch with an expert who personally uses this on their investments and is a lender I would be happy to. 

Happy to help!

 I am located here in Chattanooga and did the very same thing. I had rentals in MD/ DC area and moved here in 2016. Only knew 2 people and wanted to start investing but was not familiar with areas etc. 

If you plan to invest out of reach I highly recommend due diligence in great property management. I can put you in touch with a fantastic property manager that manages my personal investments and manages over 900+ units locally. Great experience thus far. Quick turn around times and low/no headache for me. 

Happy to discuss with you different areas and strategies in the area. 

Based on your 1% rule I would strongly advice considering the BRRR strategy to get the best return. Takes a little more trust and time but you can achieve the numbers you want and you will have a better understanding of the home you purchase after a thorough rehab.

Happy to help! Good luck

I am also located here in Chattanooga. As shared above there are several options available. 

HELOC your personal residence with a credit union if you have equity and your first 12 months usually come with an affordable intro rate ie: 2.99% and I'm sure you can complete the project in that time and either sell or refi out. All interest is tax deductible.

BELOC an investment property with equity that you already own and follow the same principals. 

Get a conventional construction to Permanent financing to rebuild. Then sell off first of 4 and repeat. Use your 1031 to roll profits into next project. 

Use a hard money lender to finance everything most expensive option but easiest money in most cases. They will usually cut you a deal moving forward as you use them over and over. 

I have GCs, HM Lenders, Contractors, and Builders in the area that can take charge and handle every aspect for you. You would only have to make decisions based on numbers. Also if you end up selling I'd be happy to help you with that personally and if you end up turning all of them or some of them into rentals I have a great property manager that manages my personal properties and 900+ units locally. 

Best of luck and I wish you a prosperous beneficial future. Excited to see what you do! 

Great opportunity in the fast growing and faster appreciating city of Chattanooga TN
Lake Life
Tech Capital
Gig City
Mountains
Scenic
Hiking
Iron Man

This is a mixture of SFH, Duplex, Triplex, Quadplex offered at an 8% Cap Rate.

Asking $4,470,000

Prefer not to split up.

C Class Neighborhood on the upturn.

Let me know if you would be interested in more information and I can send you all the details.

Monthly Rent $36,169
Annual Rent $434,028
Annual Net Income $360,662
Purchase Price $ 4,508,275.00
Renovation Credit ($38,275.00)
Final Purchase Price $ 4,470,000.00