All Forum Posts by: David Goodman

I’ll have $200k cash to use. Anyone with personal experience with either market Id love to hear from.

thanks!

Hey yall - 

I'm selling a home in Nashville. I'll be doing a 1031 exchange. I love the idea of having a cabin in the mountains, but the price tag is starting $650k for a 2-3 bedroom cabin.

The other option is putting that $200k towards 2-4 doors in Huntsville, AL which has a lower entry point but I'm confident in it's growth in the future.

Does anyone have experience with short term rentals near Gatlinburg, TN? What are you seeing yearly income gross? Or how about experience with Huntsville? 

What would you do???

Wayne - My first house hack was in 2014. I too was looking for a duplex, but quickly realized it didn't make sense. It was WAY too competitive, and the price/sqft was much higher than a single family home. I had to change what I was looking for. What worked for me was looking for "finished basement" in my home search. Eventually I found a 1960's ranch that had a completely finished mother-in-law suite in the basement with kitchenette and bathroom. These days, you may have a hard time finding a mother-in-law apartment, but you can find a finished basement that you can add those components later.

Yes, this market is extremely competitive. But we were saying the same thing back in 2014. My neighbors thought I was crazy for paying $164k on a 2800 sqft single family home in south Nashville. Even back then, house hacking didn't even cover the mortgage because I was just renting the basement. But it was still the best way to get started. Only a couple years later my home was worth %50 more than I bought it for, and the rents had caught up for there to be cashflow after expenses. 

You've got live somewhere. And unless your living rent free, you're paying someone's mortgage. Might as well work towards purchasing you're own property where a tenant can help you pay off that mortgage. And do it in a market like ours, which will continue to appreciate exponentially over the next few years!

@Nathan W. Sorry for the lame answer, but honestly anywhere within a 30mile radius is going to be a winner. I love south Nashville and Wilson County.

Hey Kallie - 

My wife and I were/are in your shoes. My gut instinct is to tell you to hold onto the home. Nashville is set to continue appreciating over the next couple years. Rents will follow.

You're exactly right that owning that property has given you great momentum in a somewhat short time frame. If you sell the house, you're removing the reason you have this momentum. You have the ability to stretch out that momentum by doing a cash out refinance on the property. The cash out refinance is also not taxed and is just as green as cash from a sale, except you get to keep the appreciating asset! It seems like you have enough equity in that home that you could comfortably pull out enough cash for a downpayment on the next home all while keeping tons of equity in your original home and STILL being able to make a small cashflow on top of it. At that point you will have 2 properties in this market that will continue to cash flow, which means you have 2 properties that can continue to appreciate to give you more momentum!

I understand the concern about capital gains, but when you are ready to sell that home, will you not put at least some of those gains toward another/multiple other investment properties? If you do, capital gains won't be an issue because you can do a 1031 exchange into more properties!

Don't get me wrong, I'm a realtor, so I love to list and sell houses. And if you'd end up going that route, I'd certainly help with that! :P

But if you guys end up choosing to hold onto it, let's connect. I'll can get you hooked up with a lender that can do the cash refinance and finance your next home at the same time.

This is what’s happening in the greater Nashville area according to Freddie Mac’s Home Price Index (FMHPI) report:

• Average home prices from 2021-2022 increased 22%
• Average home prices in the last 5 years increased 67.4%

Average rents have increased in Nashville 10% year over year. Rents naturally lag behind, but I'm confident they will catch up! I speak to a few newish out-of-state investors every week that are hesitant to ender our market because they can't find that 1% deal. Unfortunately even properties found off the market are selling at a retail price. And it makes sense. Nashville is poised to continue this growth for a variety of reasons. If you'd like to read more on why the Nashville market in line to continue this growth check out Jeff Rohde’s article from RoofStock.com.

https://learn.roofstock.com/blog/nashville-real-estate-market

My first property was a single family home in south Nashville that I bought for market value. My neighbors couldn't believe what we spent on that home. Fast forward 6-7 years later, and that property is now worth more than double what we purchased it for. And guess what, it rents out and cash flows just fine now. Of course we were in a different position back then because my wife and I house hacked the home for the first 2 years. We lived upstairs and our tenant lived downstairs. By the time we were ready to find our next home, rents finally caught up and we were ready to make the next move! I can't recommend this strategy enough for anyone who's looking to get their start in real estate. It's a life changing move you won't regret.

So if your a newer investor that's looking that's primarily interested homes that have high cash flow on day one, Nashville probably isn't your market. But if your an investor that as the ability to buy and hold, I think Nashville is the market for you. Prices are still relatively low compared to many metropolitan areas, and we are on the growth train.

Are you guys as optimistic as me? Any predictions on what we'll see from the Nashville market in 2022?

Hey Tyler - Welcome.

One of the hottest in the Country

@Matt Schlosshauer

Welcome Matt. Investor and agent/property manager. Let me know if ever need anyone local to do any work!

@Tyler Huser

You got this brother! If your time is better spent focusing on the insurance business and the 9-5p, focus on that and spend money on a good pm company!

%1 rule is tough to find, but if your willing to out more down, you Can achieve cash flow. You may focus on newer builds if you are able.

Good luck sir!