All Forum Posts by: Joe Lee

Looking to connect with an investor-friendly realtor in the Jacksonville and surrounding areas. I am a first time OOS investor from NY. Looking for cash flow properties with a budget of low $200s. Prefer turnkey. 

Thanks!

Quote from @Chris Davidson:

@Joe Lee with a max spend of 200k Boise is going to be out of the picture (median sales over 500k). For max 200k purchase and rehab you are going to be midwest or SE. Take the time and hop on redfin, zillow or your choosing search engine and see what properties are going for and go from there. It's been awhile since I have been in Chatt, but you probably wont be in an area you want to be in Chattanooga, but instead will have to go to surrounding more rural areas for 200k. 

Best of luck but save yourself some time and spend 5 mins seeing if there are houses in the cities you can afford, if not move to the next market or work on increasing the budget if you want to be in that market.

Thanks for the advice, Chris! Yeah, I just threw those cities out as examples - totally understand that they may probably already be well saturated at this point. I'll certainly have to expand my search. 

Quote from @Ethan Peacock:

Athens, Sweetwater and Madisonville, TN areas are growing now and are expecting major growth within the next two years. It would be a great(and cheaper) market to get into.

 Thanks, Ethan!

Quote from @Michael Dumler:

@Joe Lee if your main priority is for the asset to appreciate, ideally you should be targeting submarkets 30 to 45 mins away from major metropolitan areas. Many experienced investors will use the hockey analogy that you should, "skate to where the puck is going to be, not where it has been." Simply meaning, you need to buy where things are "up and coming." This points to the importance of performing your due diligence, specifically by researching key indicators such as population growth, job growth, major company relocations/establishments, local policy, etc. Above all else, when it comes to investing out of state, you must work with vendors that know what they're doing. You could be in one of the hottest performing investment markets, but that doesn't mean much if your team is lacking in skill, knowledge, and work ethic. Hope this helps! 

That's a good point! Definitely will look into tertiary markets and do my due diligence. 

Quote from @Josh Ledbetter:

Hey Joe - My wife and I bought 4 single family rentals in and around Chattanooga within the past 6 months and have several future AirBnBs under contract. We have noticed that the more expensive rentals are in HIGH demand and perform better for us, so our focus might be a touch different than yours. 

If you want to be at or around $200k, I'd look at Cleveland, TN or Flintstone, GA. Great rental markets and should keep you out of the war zones. 

Happy to help walk through your strategy and how we have helped others here in Chattanooga. Good luck with your search!

Thanks! I'll definitely do some research on the neighborhoods you mentioned. Will also DM you so we can connect!

Hello! 

I would like to get into my first real estate investment and have been doing some research. It seems finding cash flow deals is slim-to-none, unless I'm looking at war zone areas where entry price is low but rents are high, and so I've pivoted to focusing on appreciation with the expectation that rent would cover all expenses + a little extra. With my focus shifted, I'm trying to find cities/towns that fit certain criteria. 

1. high growth and appreciation

2. max spend of around 200k

3. low, or at least u.s. average, property taxes

I'm looking for turnkey but prefer not to buy someone's flip

I've seen cities like Boise, Chattanooga, Jacksonville thrown around but I'd like to know if there are any specific neighborhoods within cities that I should be looking at. Please let me know if anyone has any suggestions! I am literally open to anywhere in the u.s. 

Also appreciate any general advice for a first time investor.

Warm regards,

Joe

Thanks for all the responses. 

It looks like the general consensus is to formalize month to month tenants in a lease or general contract naming the LLC as the landlord.

Having a receipt book seems to be a good idea - that way there is a paper trail of all rent payments that are made in cash. I don't think asking the cash tenants to pull cashier's checks or money orders will go over well with them. 

We just recently created an LLC for a rental property that has some month to month tenants. Will this be a problem? Do I need to create a formal lease where the LLC is named as the building owner, or is it okay to keep it month to month and just make sure that the tenant write checks payable to the LLC?

Side question: If a tenant pays rent in cash, I would simply deposit this cash into the LLC bank account. On paper, it would be hard to differentiate whether this is a capital contribution or a rent payment. Does it matter? Do I need to do something so that the source of cash deposits is easily distinguishable?

Thanks for the reply.

The prospective tenant would be signing a personal guaranty for the entirety of a 15 year lease. The gross rent collected for the life of the lease will be ~5.5M so I guess that is how much the tenant will be guaranteeing. Is the landlord expected to hire a private investigator to determine the value of the tenant's assets as part of the due diligence process?

How much value do you put on personal guarantys when deciding to accept a new commercial tenant? Do you relax your requirements (financial or otherwise) when personal guarantys are offered?