All Forum Posts by: Joseph Gibney

@Victor Jernigan - thanks for your note and question.  I'd love to attend the KnoxREIA - unfortunately I'm on the road all week.  However I will make a point of trying to get to one over the balance of the year.  I'm very much still a student of the business so would appreciate the knowledge that's represented by the group.

As far as my 8 plex goes, I'm generally satisfied with performance.    In hindsight, I paid a little too much.  My actual cap rate comes in around 6.6% so it cash flows but not quite at the rate I was planning.  I had planned to push the rents a bit but have thus far been unable; I learned that the hard way after keeping a unit on the market a bit too long at a price that wasn't generating prospective tenants.  All in all, it was a good educational experience and forced me to understand the potential risks of assuming I can get immediate upside, i.e. ability to push the rents, vacancy costs etc.

I've made rational offers on several properties in the last few weeks (4 plex and duplex) but haven't been able to get to contract.  I've got a growing sense that Knoxville is getting too expensive, hence my potential interest in Johnson City.

Thanks again for you note! - Joe

Hi David, it looks like you made an investment in Johnson City earlier this year.  I'm an investor based on Northern Virginia with some properties in Knoxville - a few hours southeast of Johnson City.  In search of better returns, I'm doing a bit of research on Johnson City.  Are you happy with your investment?  Do you like that market?  I'm thinking of a road trip but would love some intel prior to spending the time.

Thanks!

Joe

I have 8 units with Brun Property Management in Knoxville.  They have several hundred units under management and have done a good job for me - professional, good attention to detail, etc.  Their website is www.brunpm.com.  Good luck!

@Jake Stenziano Hi Jake - we paid about $62K per unit (x8).  From my observation, that's around what 4-plexes are going for in K-town these days.  Do you agree?

Mike J. Hey Mike - the FL property was originally purchased as a residence for us back in 2005 - height of the bubble! We lost about 40% of the value. Later we relocated and became "accidental landlords" because the loss on sale would've been too high. Our intro to real estate investing was that house - lost money every single month for 5 years. Finally cut our losses when house hit what I thought to be best value relative to ongoing losses. We learned a lot from that house - it was a nice property in gated/guarded/golf community (i.e. high HOA fees). Our rental was competing with investors that bought for 40% less than we did, plus houses right outside the community were getting the same rents (i.e. I wasn't able to pass along the high cost of the neighborhood amenities). Long story short - it taught us to focus on the fundamentals like market rents, expenses and cash flow for investment properties. There may be some deals left in Orlando but I think the real money got made there during the crash back in 2008-2011. Thx Mike!

Ron Sid - thx! I've moved for my job about every two years for the 15-20 years so we don't really have a "local" market to invest in. Given that situation, my wife and I looked at non-local markets that we had good knowledge of. Originally I intended to invest in Orlando but in the last 5 years the market has recovered to the point that it's hard to find deals that cash flow. I grew up in Knoxville and still go back to visit family several times per year. Plus I know the city, have lots of connections there, and can look at listings with more local knowledge than a true "out of town" investor. The numbers are still pretty decent there too, especially for multi-family. Thx and good luck Ron! Joe

Thx Nick!

Hi fellow investors - 

Closed this week on an 8 unit apartment in Knoxville, TN - actually 2 identical 4-plexes located adjacent to each other. Luckily the two buildings are on separate parcels, which allowed me to get conforming 30 year fixed rate loans. Looks to be a good deal - high quality, well maintained properties selling at or below what the average (read: not well maintained) 4-plexes in the area go for. Rent-to-price is a bit low at 1.1x right now; but it cash flows decently after capex reserves and there's some upside in rents of about $75/unit if I'm willing to risk some of the existing tenants. As a financial guy, I like IRR - and this deal comes out at around 11% over the long haul (fully loaded with capex, etc).

Shout out to BiggerPockets - it's amazing how useful this site is.  Although I'm not a big forum poster, I can find good answers to every single question I have when I look stuff up on the forums; and in-between deals, there's nothing better than listening to the Podcasts to learn and stay motivated.

At the beginning of the year, my wife and I set the ambitious goals of 1) selling our loss making Florida rental house, 2) selling some vacant land in Florida to raise cash, and 3) getting 10 doors in our new market of choice, Knoxville, TN.  Ten months later, all goals for the year have been met.  Looking forward to 4 more doors next year.

Thanks BiggerPockets!

Joe

Hi - I'm an out of town investor in the Knoxville / Oak Ridge, TN area.  I'm considering changing agents - does anyone have a recommendation for an investor-friendly agent?  My interests are mostly duplex and fourplex units.

Thanks,

Joe

Thanks @Cal C. and @Matthew Schroeder.

Cap rate was 9.5ish.  On comps, truthfully I didn't really look at them - I based the offer on what I though I could make money at.  Will have my realtor pull comps to see what the market is doing.  Newbie mistake on my part - but I would have thought rational investors would all wind up in pretty much the same place from a valuation perspective, i.e. no one would pay a price that wouldn't allow a decent return.  Thanks again for your thoughts!

Joe