All Forum Posts by: Mat Farmer

@Praveen Balaji Hello and welcome to the Nashville market.  I have been active out here personally as an investor for several years and also as a real estate broker helping other investors source deals for their personal portfolio.  There are a number of things you need to consider when investing in ANY market when doing so from out-of-state, and Nashville is no exception.  Things I typically work through with my clients are (1) risk tolerance, (2) price point, (3) level of rehab, and (4) exit strategy, to name a few.  Feel free to reach out to me if you would like to discuss.  Nashville as a whole is a market that can satisfy all tastes and preferences.  Either way, best of luck to you!

Hi @Kally Dobak - I am the General Manager and Principal Broker for New Western Acquisitions here in Nashville, and I wanted to provide some information on this to possibly help you along your way.

I spoke with Anthony, the Sales Agent you and your fiance (Zain) were working with on this transaction, and he informed me that at the time of purchase there was a conversation about the presence of a floodplain on the property, but that local maps showed that it did not actually touch the property dwelling.  Typically in situations such as this, an elevation certificate (or something similar) can be obtained to show that the dwelling itself is not in the flood zone, but that simply a portion of the property is.  An elevation certificate can be obtained from a survey (though there may be other methods locally as well).  I am by no means an expert on this and am simply regurgitating experiences of other investors I have worked with, but in this scenario the dwelling itself would not be treated as having been in the floodplain. 

After reading your post I circled back with the Acquisition Agent who procured this property, and he confirmed that the information provided by the seller was that no flood insurance was required on the property due to the floodplain simply encroaching on the backyard and not the house. I hope this helps. I am unaware of any reasons that the basement would not be allowed to be finished out, unless they are treating the house as being a flood risk. Here is a quick link from the FEMA website that quickly outlines Elevation Certificates and how to obtain them.

https://www.fema.gov/media-library-data/1428941960043-a8f37b7e3af25f47396bbff04e7bf036/FEMA-HFIAA_ECFActSheet_040715.pdf

@Adam Nelson - Seems like I'm echoing what everyone else has suggested on here, but I'll provide a little context based on recent reports.

Based on recent Realtor data for April in Middle Tennessee, there's a few points that should provide quite a bit of optimism. First and foremost, there were 3,479 home closings in the month of April, which is a record high for the month. With this record high number of closings, the median price for both single-family homes and condos grew 4.1% and 3.3%, respectively. Inventory is indeed up compared to last year, but Nashville is still under 3 months of inventory. Anything under 4 months is commonly understood to be a sellers’ market. Closings and median prices up along with inventory that represents a relative shortage definitely doesn't line up with a cool down.

An additional indicator to consider is that real estate direct-buy proptech companies such as REX, Knock, Opendoor, Offerpad, and Zillow (to name a few) have already raised $1.9 Billion in investor funding this year. Several of these firms are either already buying in the Nashville market, or are positioned to sometime within 2019 to 2020. These firms tend to not necessarily position their operations in markets where margins are the widest, but rather in markets where their exit of the property is the quickest and most ensured.

Again, I thought it would help to provide some constructive data to what everyone else on here has always pointed to. I've been active in the REI space in a couple markets now (only operating in Nashville currently), and there are always folks who are waiting for the next cool down - arguably, at some point they will inevitably be correct, but that doesn't appear to be anytime soon in Nashville. Amazon and Alliance Bernstein were the biggest announcements of new firms coming to town and are supposed to bring a combined 6,000 new jobs to the area with an average pay of $100k or more - as it stands, those jobs have yet to arrive. So, the growth in closings and median prices we've experienced as of late is still not indicative of what is to come.

Happy Investing!

@Jeremy Durham - I am the Principal Broker & General Manager for New Western Acquisitions in Nashville.  I would be happy to explain this further offline if needed, but wanted to go ahead and address some of the claims you made on here.

A down payment in the form of fully certified funds are required for us to sign and fully "bind" an offer from a buyer.  However, with the thought of good business practices in mind and keeping strong investor relationships, we do hold the right to allow certain leniencies if a property is made available on a bank holiday (with the commitment that the investor will deliver certified funds by a specified time the following day) - this decision was made yesterday and fully communicated to all interested parties.  Were you to have submitted a signed offer for the property prior to the investor who purchased the deal, we likely would not be having this conversation.  However, if an investor has received a commitment from us (after providing completed offer and non-certified down payment) that the property is theirs pending delivery of certified funds by the following morning, it would be very bad business to renege on that commitment simply because another investor is interested.  I do hope you can understand that.

As for the claim regarding your down payment on file being withheld from you - with all due respect, this is simply not true.  It was communicated to you on February 7th by your Sales Agent, upon your request, that this down payment was available for pick up at our office (this typically being the preferred method as most investors do not want to wait for the mail).  Then, following the disagreement that arose over the aforementioned property yesterday when you intended to use that same down payment to purchase the property, you reaffirmed your desire to have the down payment returned.  At this point we figured it best to simply mail it and not await you retrieving it.  However with it being President's Day, it was not able to be mailed out until today.

I find it unfortunate that the timing of another investor's purchase and the means in which it was allowed has caused such discord.  I do hope a relationship can be salvaged here going forward, and I wish you the best in your real estate investing business regardless.

Hello Shawn,

I would first off like to say that we appreciate your business and have enjoyed being able to help you out on your various projects. As the General Manager and Principal Broker of the New Western Acquisitions office that you referenced in your post, I have an intimate knowledge of the transaction itself along with all documentation that was delivered and signed-off on. It is indeed unfortunate that the seller had not vacated the house as agreed upon in the temporary occupancy agreement; as most investors know, not only does the market produce distressed homes, it often produces sellers in distressed situations. It’s for that reason that we as a brokerage do our best to protect our exposure as well as the exposure of our client, which in this case included a certain amount of seller proceeds being held in escrow to confirm vacancy. Thankfully, as you and I both know and were able to confirm during our recent phone call, vacancy has been confirmed and you are well on your way remodeling the home.

Given the size and scope of our brokerage, we pride ourselves in continued relationships with our clients, which only happens by taking care of them from the outset. I’m aware that your original post came from a place of frustration and a breakdown in communication, and we were fortunately able to work through that. However, the original claims made about documentation not being provided to either you or the title company are inaccurate. I have made a point to review every document/contract/form on this transaction and can confirm that the appropriate steps were taken to communicate the temporary occupancy agreement and that dates were correct. Going forward, I believe we are on the same page that a higher level of dialogue would be beneficial so that we can confirm all parties are on the same page.

I wish you the best on the project. It’s a great property on a great lot and I am excited to see what you and your team do with it.

Mat 

@Dennis L Lewis Jr - welcome to investing world.  To answer your question regarding advice for a newbie, just network as much as possible, dont be afraid to ask questions and put yourself out there.  Also, develop a good filter.  Everyone has an opinion or standards for what is or isn't a good investment, but you need to identify what works for you.

Feel free to reach out if you ever want to chat.  I've been in the game for a bit.

lol...I've honestly never noticed it said TX. What fail on my part. I'm in Nashville, Tennessee. Changing that now. 

I imagine this post will get a good bit of response, but looks like I'll be the first...yay.

I'm a realtor in Nashville and specifically focus on working with investors. Feel free to message me so we can swap info and set up a phone call.

Hey Sally, I agree with the previous comments. There are not many areas around Nashville that I would advise against investing in. I just sold a Duplex last week in east Nashville that rented for $1500 a unit. I wish I would have seen this post then! 

for some reason my #4 got censored. Maybe if I type it another way? It was connected investors dot com.