All Forum Posts by: Jamie Parker

New construction in a city like Nashville was and has been a staple in how I started my journey as wholesaler. Wholesaling in Nashville was my first experience into the world of real estate investing. Understanding zoning, and land uses has been the extent of my experience. 

If you are familiar with Nashville, The Nations, is what i think of. Doing my first wholesale deal in 2016, at that time there were builders buying blocks of houses from residents and doing new construction. That was almost 8 years ago. I would argue that the development prior to that when as far back as 2014 for new construction. Turning an entire neighborhood where over 80% of the homes are new construction dating back to least 2015 till now, over a span of ten 10 years.

Building houses is required to initiate a major gentrification process of a neighborhood, but the guy that invented tires didnt invent cars as we see them today. In the 10 year process new construction exit prices were 350K- 420K during 2016-2017, by 2019, 499K-520k were starting to move. 5 years later ( accounting for COVID and mortgage rate changes) prices are up around 650-800K in the same area. 

In Memphis Tennessee, would I ever think this would be the place to start something like that 10 years ago, NO. But today, I have a different attitude towards a major infill redevelopment of an area in Memphis. While there are at least 5 other areas that could be a launchpad for a project of this magnitude; XAi, BlueOval(Ford) and major zoning proposals changes to increase density, specifically. According to my thesis on the subject $80MM investment over 10 years resulting in 30 new homes per year would be the ticket. 

Has anyone ever initiated or been close to ground level in a major redevelopment of a neighborhood?

How did you chose that area?

How did you get past the first year or two?

What were the initial sales price in the very beginning? 

I appreciate any thoughts on the topic. 

It is wild how creating solutions can change a situation, 

April 1, 2023 I closed on 1522 Latham for $35,000. Making Payments consistently and actually bumping payments up to over that actual payment amount. In July I realized that this payment hurts. A non performing asset that for reasons mentioned before and a payment for a property that was recently torn down. I realized that something had to change. So with I decided to ask the seller(lender) for a loan modification. 

After going to the board of equalization to reconsider the value of the property, the came back with a updated assessed value of $8,000 and some change. After speaking with the seller, the seller was very understanding. In the regard the seller mention that I SOLVED a PROBLEM. Going through environmental court process, evicting the squatter and getting the property out of a blight situation. After the seller made those statements, I was actually joyful to hear that I was useful in this situation. For me at this time in my life, that is huge. 

Short story long, we agreed on a modification of the sales price to $15,000. 

This deal has been such a lesson in persistence and sticking with it. Accepting that problems come up but not giving up, finding solutions and keep going.  

For anyone interested. I finished my MBA in Business Analytics about 2 weeks ago. The biggest take away was my ability to utilize machine learning for this process. This using a machine learning approach creating returned something a little different than I first anticipated.

Without boring you with methodology, the result of an in depth study, leads me to believe that this is how gentrification starts. After listening Jerome Maldonado for the last week and most importantly taking notes, having 2 properties to start is the best place to start. 

A quick run down:

at $150/sqft 

1473-1666 sqft  

1667-1833 sqft

1834-2000 sqft 

The chart shows 4 categories but that can be broken down into 3 categories. Machine learning shows that building 14 more smaller properties will be more profitable than over a 10 year period than building 8 larger homes. The average build cost is nearly identical but the lower price range nets out 308 builds in ten years vs 303 with conventional algorithms. 

What i will do is use $155/sqft

1426-1613 sqft

1613-1773 sqft

1774-1935 sqft

The current footprint is 1448 sqft on 1522/1516 Latham. Using the average 1519/1520 of livable square foot may be the sweet spot I have been looking to find. I went a long way to get it, but I am poised for the next phase in getting these bad boys out of the ground.  

The next installment of 1522 Latham and also 1516 Latham:

Months have past and this project has lead to many moments of "what am I thinking" and "one step in front of the next". After finally surrendering to the city's opinion and not fighting the courts something great happened. A property, condemned and badly damaged. Talking to contractors and they suggesting to simply start over. I had to swallow my pride and ego to accept what was simply the best course of action to take in the matter.

This past weekend, labor day weekend, driving around town with my mom and daughter running errands. I got the ideal to drive past the property to see how bad the weeds were. I was simply waiting on the day that the county would demolish the place. The decision was made back in May. I didnt see my tax bill showing a line item. Nothing. However I decision to go with the ideal and drive by. Such a refreshing sight to behold. 

Quote from @Caleb Hall:

Quote from @Matt C.:

Hey All -

I am widdling down some areas I'd like to remote invest in. I have one house-hacking property in SLC, but homes here have gotten a bit too high to see any cash-flow. Looking for some less expensive areas that may not see a ton of equity growth, but should get a few hundred plus in cash flow each month. I have been hesitating on pulling the trigger for about a year now and I am getting frsutrated. Gotta make the jump. 

I am mainly seeking everybody's favorite resources for neighborhood analysis. I have a few that I utilize alongside Google Map Street View when I am really digging in, but I find I have to bounce around for resource to resource to get the full picture. Oftentimes, the data is at least a couple years old. 
What are your favorite resources?

Would also be interested in any suggestions for markets/neighborhoods that would be a good fit. On the higher end of what I am currently looking at, I have Twin Cities and Indianapolis. On the lower end, I have west of Detroit and some areas in Memphis, with preference currently in the Memphis area. If you have Realtor or PM teams in these areas, please let me know!

 I am a Realtor in Memphis, TN that works with savvy investors. I'd love to connect!

Would like to connect @CalebHall @JordanRay

Quote from @Chris Seveney:

@Jamie Parker

You really need to do a more thorough job on the comps and see why did one sell for $150-$190, that’s a huge spread

I built this spreadsheet and sent it to the seller. The seller went down from 190k to 160k in 2 days. before inspecting the property my number is around 134k, but yea. Check out this break down.         https://docs.google.com/spreadsheets/d/14j4Fbzx3L3N9WLn9Sfj9...

Quote from @Chris Seveney:

@Jamie Parker

You really need to do a more thorough job on the comps and see why did one sell for $150-$190, that’s a huge spread

1. 150k, hit the market @235k in  9/2023 sold 2/24 . 3/1 New carpet, Tile bathroom. Clean finishes. No pictures of the kitchen. 

2. 170k 3/1  no pictures on zillow/redfine, no listing sold in 2021 for 180k sold again 2/24 for 170k

3. 180k 3/1 list 199k in 8/24 sold 2/24. no appliances, fair rehab, exterior paint, New hvac, new water heater. LVP Flooring throughout 

4. 190k 3/1 listed @ 210k in december, sold for 190k this month. mordern kitchen, new water heater, new hvac & roof (5yrs) 

So I found 2 more

5. 199K 3/1 was a flip sold 4/23 110k listed 209k in 6/23 sold 8/23 199k full finish, clean, hardwood floors, paint interior/exterior, new windows, new fixtures. refinished bathroom.

6. 280k 3/1 closer to mid town Listed at 269k 3/24 sold in 4/24 280k.  Renovated kitchen with recessed lighting, stainless steel appliances, fences, 2018 Trane HVAC, 2015 tankless water heater, 2015 roof, 2015 electrical panel, fence installed in 2018.

Offering 110k for a flip would consider the 50k in rehape not considering the cosmetic stuff yet. The 3 of the first 4 are within a .1 of a mile the other 3 are across a major street in a neighborhood closer to an area college. 

It appears comp 6 would be the example to follow

Working with a coach, I have been agreed with a accountability program with a life coach business coach I know from real estate years ago. Not know where to start, this program has been very helpful to getting back in the game. So what been happening: 

I have made it to the point of conversation with a couple of sellers at this moment. 1 seller offered seller financing, I think that one is in the bag. 1 other is the reason why I am making this post. 

seller asking 190k. Comps(4) for the same 3/1, in the area(1 mile radius) have sold between 150k and 190k. If you average out the "sold" comps, the number is 172,500. Using the 70% before subtracting repairs 160,425.  After talking with the seller, Furnace needs to be replaced, part of the roof is 3 yrs old/ most of the roof 18yrs old, plus back taxes of around 5,000. 

ARV 172500

70% 160,425

repairs total 45000  (roof 15,000 new a/c 15,000 windows 15,000 taxes 5000)

MAO 110,425

I guess what my thing is. I don't mind making offers like this at all. From a wholesale standpoint, it is most beneficial to be able to get these number correct. Getting those reps in with the most accuracy in analysis. I guess what I am wanting to ensure; that 17,500 between the highest 3/1 comp and the average of all the comps, is  a good starting point for making my calculations.  

Quote from @Carlos Ptriawan:

you can try but these DST and GP have biz plans they must follow. Unless you want to overbid someone else they would not entertain if you want to buy an asset with a 25% discount lol, they are the pros.

In the part of town I am looking in, I have hear other investors all but refuse to buy anything near those zip codes. Funny turn of events, the "pros" are invested there. Well my goal is to bring "highest and best" use to the neighborhood. 1 year ago you could buy property for 35,000 and collect rent. 1 year late new construction under contract for 250k, rehabs listed at 239k. So yea getting a couple of those properties off there hands would be ideal. It may be for rehab price ultimately because I think the lot price for new construction is in the un 20K range for now. If the new build price gets over 300k. then we have lift off. 

Quote from @Chris Seveney:

@Jamie Parker

Yes a property can be liquidated. I would not send a letter I would call or find someone on LinkedIn

Thank you for that advice I have found that one of the Owners (maybe a partner GP/LP) is involved with a property management company in the area. Would stopping by the business be too aggressive? or, as you said, reach out to them on linkedin be sufficient place to start?  Would these types of companies prefer a cash purchase, or would seller financing be entertained?