All Forum Posts by: Kevin Patterson

Assuming this is a 2/1 (based on square footage), you're looking at an ARV in that area in the $200-225/sq ft range. However, you'll probably want to do some more specific research on the comps in the immediate area as I've seen recent sales of small SFR's near Shelby Park go anywhere from $180/sq ft to almost $300/sq ft, depending on exact location, home size, rehab quality, etc.

As far as land value, that will be completely dependent on zoning and if, in fact, a developer could build two homes on the lot. Definitely check into how the property is currently zoned and what potential it has to be rezoned prior to moving forward with an offer.

You're right on point using all the free websites to advertise (Craigslist and Postlets pretty much hits them all). One question, have you renewed your Craigslist add to get it bumped back to the top? Doing so could go a long way in getting those inquires flowing again.

Also, make sure that your ads, especially on Craigslist, are professional and detailed regarding property info, rental criteria, and include high quality photos. Doing so will help unqualified leads to pre-screen themselves and attract higher quality tenants overall. If I were looking for housing via Craigslist I would be very wary of any of those two-sentence ads you see with no photos and poor grammar.

With all that said, dropping the price down to $1195 isn't a bad move necessarily, but if I were in your shoes I wouldn't feel in a rush to do so just yet. The rental market demand in Nashville is unbelievable right now, so as long as you are offering a clean/safe property and in the ballpark of what would be considered ¨market rent¨, you should be just fine.

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Great script! Thank you so much for the response. Very helpful.

Hello All,

I am a new investor and working hard to gain knowledge and put myself in the best possible position for success when I do find that first deal. One of the initial action steps I am taking to move forward toward the first deal (and beyond) is to network and develop relationships with as many people as I can within my market. Therefore, I have lined up some sit down meetings with a few convention lenders, scheduled for later this week.

In order to prepare for these meetings, I have started to compile a list of questions to ask each lender. I feel as though I have a good start to this list, but was hoping to get some feedback from you guys (and gals) as to what questions you would ask a conventional lender were you in my shoes.

And for the purposes of clarity, I plan to be a buy and hold investor of SFR and small multis. Also, I currently do not have any potential deals lined up nor have any other agenda for these meetings other than to connect with these lenders and learn as much as I can.

Thanks!

 I love the comparison chart! Thanks so much for sharing this. All three properties look like great assets, especially the one in the middle.

And I'm glad that you have debt coverage ratio included in your comparisons. Truthfully, I wasn't too familiar with this metric as I haven't heard or read much about it up until now, but it seems to be quite an important value to know when analyzing a deal/tracking performance. Thanks again!

Thanks again for all of the great replies! Very clear and useful information.

@Robert Leonard

@Hai Loc

Thanks so much for the detailed responses! Makes perfect sense.

Seems like an investor's preference on cap rates is all about finding that comfort level sweet spot between potential returns and risk tolerance/headaches. 

I'm still new to the real estate investing game and in my studies I have recently come across cap rates. While I understand the basic idea of a cap rate and how it is calculated, I'm a little confused on how to read them. For example:

1) Are cap rates utilized to analyze SFR, or just for multifamily/commercial?

2) Do you always look for a higher cap rate in a deal, or is it sometimes advantageous to seek out properties with lower cap rates?

I've been doing some digging, but can't seem to find a consensus. Any clarification would be greatly appreciated.

Thanks for all the welcome messages! I look forward to interacting with all of you here on the forums and around the site.

@Erik Peterson I hope to see you at a REIN meeting sometime soon!