All Forum Posts by: Mark Gliebe

@Jordan A Bradley Welcome to bigger pockets!

I will go down and answer some of your questions as well.  Some of which may echo Luka.  

1. Zillow is definitely not always accurate and the best and most accurate way of running comps is through the MLS. That being said, pretty sure you can get MLS access without an agent, but if your time and travel will limit you, it may be best to have an agent run comps for you.

2. I will address and agree/disagree with Luka on a few points here. Auctions are definitely a great way to get yourself in some problem properties especially with title/lien issues. You would rather have structural home issues/ tenant problems, etc. than deal with title issues, ask anyone that has been through it. Bandit signs can be a decent resource, but like Luka said you need to do a ton of them. Better option there is door knocking and creating a systematic attach and approach. The key is consistency and persistency in anything you are doing, kind of like music. Door knocking is cheap and so are mailers if you are focused and deliberate in your attack. Lastly, if you do not have the time or resources to do either, than buying steep discounts from the MLS and wholesalers are your best options. There are deals out there and they are on the MLS sometimes in plain sight and in wholesalers inventories. I say loosely "deals" because everyone has a different tolerance level than others when it comes to investing. Some 60% of the resale value others its 80%. Know your budget and the costs associated. Get connected and get plugged into properties. It does not cost you anything to know what is out there, whether you actually purchase it or not.

3. Agree with Luka, not necessarily, but you can do a double close and I would recommend asking an attorney on that.

4.  There is not trick.  You have to stay on top of them.

Hope that helps.  Look forward to helping any way I can.  

@Joseph High yes it is an older building (could be 100 years old), but not sure.  $200k a door you are saying is very reasonable for that area?

@Joshua Okai-Tetteh Hope this link helps. https://epermits.nashville.gov...

@Jeremy Goebel properties continue to be in demand especially as affordability in certain areas is a barrier to entry.  However, it depends on the purchase price, neighborhood/area, condition, etc.  Don't mean to sound like a broken record, but you have to drill down on certain areas, look at comps and determine cash flow.  Obviously, blue collar, university, and urban areas attract more renters than others and that does not change no matter where you are in the country.  

@Luka Milicevic thank you for the breakdown, especially by areas and counties. Yes this is near the Belmont/Vandy area. Forgive my ignorance, I was spitballing the 8-10% based on gross net, not NOI. I was wrong, but if adjusted for NOI, half of 8-10% would be 4-5% which is what you were referencing. Overall thank you for clarifying and clearing that up.

@Jeremy Goebel Nashville continues to be ripe for investing.  Nashville job market continues to grow and is the best indicator of growth.  Also Nashville has a diversified job sector as well (tech, auto, tourism, logistics, healthcare, entertainment, manufacturing, etc.) People get downtown Nashville and all the cranes confused with opportunities in surrounding neighborhoods and outlying suburbs of Nashville.  

What is your investment strategy and where are interested in Nashville because you have to drill down to specific parts of the metro area to where certain investors have different tolerance levels.  

Zhi - You can find the zoning for those properties fairly easy on Nashville Parcel GIS viewer.  @Joseph High is correct though, the key is making sure the zoning matches the returns. There are some other creative ways (I.e. DADU's - detached accessory dwelling units, corner lots, etc.) in specific neighborhoods that you can do to find STR's, build options or long term rentals.

@Michael Le thank you for your input and education.  I have a few commercial brokers I know, so I will ask them those specifics.

@Onaje Barnes thank you for your education on calculating those costs and rates.  Very informative info. 

@Matt Nusbaum when you say concerned with anything above 7 or 8%, do you mean 9-10% cap rates are not ideal properties or not in great areas.  Forgive my ignorance, could you elaborate on that?

@Peter Nikic thank you, I will check and see from some brokers if that is accurate for Nashville.  Does age of building have an effect on the cap rate?  It's pretty much college housing in an older building in the best rental and one of the most affluent areas in Nashville.

@Otis Sanders I know we talked offline, but I wanted to respond to your question in case anyone else was wondering the same thing.  Essentially the city of Nashville wanted to increase density and it all depends on the zoning.  Zoning designations of R (meaning residential) 6, 7.5, 8, 10, 15, 20 etc. (numbers meaning lot square footage - 6,000).  For example, if one has a lot at 7,500 square feet and it is zoned R6 then on face value you could knock down the current house and build two.  That is without knowing lot frontage, and a bunch of other factors.  The same thing would apply to bigger lots.  If the lot was 5,900 square feet and zoned R6 then you could not build two.  The reason why this started and became possible in Nashville as of recent years was because of the value of the land.  The land was/is worth more than the structure (which most of these were post WWII to 1970s ranch style 1,000 sq ft 3/1 homes).  Typically land is worth 10-30% of property value and the rest of the value is in the improved structure.  In Nashville what you saw and still see is the land and improvement values inverted.  To be brief, that has caused a feeding frenzy on tear downs and building two.  

What is a good cap rate on a 20 unit apartment complex close to 2 universities in a highly desirable and rentable area in Nashville, TN?  Is 6% low, 8% average and 10% high?  Forgive my ignorance but what is that based on, yearly gross rent?  More specifically, at 20 units and they each rent for $1500/mo, that is $30,000 total monthly and multiplied by 12 equals $360,000/yr gross rent.  Is $4 mil purchase price at a 9% cap rate good?  Being in one of the most desirable neighborhoods and rental areas of the city, how low could you go on cap rate or said a different way how high could you go purchase price?