All Forum Posts by: Rhett Kelton

Jessica,
My two cents about Middle TN.  Most of these posts have been about Eastern TN.  I live/invest in Rutherford County (Murfreesboro), just south of Nashville.  Like the others above, if you take a call, show up, and are honest, you will get as much work as you want.  Construction is still booming here.  There are plenty of stats and articles out there that show that Nashville is still having about 100 people a day moving here.  I think the job market is especially diverse and by extension, strong. Like Mark said above, almost all of those job areas are stable (short of the tourism, which just got hit by Covid- two of my tenants work in the Nashville service industry and the only reason I had a tenant that couldn't pay fully this past 2 months)
That being said, investing in the downtown Nashville market is going to be harder.  You can still find cash flowing flips, but many of those will be word of mouth.  It would really depend on how much you want to make on a flip.  I doubt you could make more than 15% profit, and that is knowing the right people on the buying and construction sides.  If you can find multifamily though, you are gold.  Investors are eating them up.
I think it will be easier to find the deals a little further out- Lebanon, Murfreesboro, Spring Hill, Hendersonville, etc.  I don't know much about Clarksville, but have heard that can be a good place as well.  I know you can find flips for 25%+ around here.
Living in Rutherford County- my family just bought a mini-farm about 12 minutes from downtown Murfreesboro for about 20,000/acre (just the land).  Depending on the size of the property (bigger it is, the less per acre), you can expect to pay about 10-35k, depending on how far away you are.  I see 5 acre lots 7-8 minutes from downtown (Murfreesboro) sell for about 30-35/acre.  Just slightly further out, there was a 20 acre lot that sold for about 10/acre.  The easiest way to find out some of that information would be to look at the auction sites here.  A lot of land (and investment properties I guess) is sold via auction in Rutherford County.  At the auctions, land you can often find a good deal on.  As far as builders to get on with, the easiest way is probably just to ask a couple of the mortgage bankers at the local banks who they would recommend (and not!)
For investment properties, auctions are dependent on who show up if it is a good deal or not.  Sometimes people are paying retail, sometimes not.  But it is definitely getting a little crazier every year.
Also, it is very hard to find a nicely fixed up house under 200k in Murfreesboro, so there is a good starting point.  

@Matt Fore

What is the address?

At least in Murfreesboro, it all depends on what sort of ROI you are looking for. I live and invest in here, and while there are certainly properties for sale that will cash flow, lots of them prices aren't good enough for me. It seems like some of of these investors here are counting on appreciation.

I agree with Mark above- there are other things here that would concern me more than tornado's.  Including earthquakes and hurricanes :)

They do not affect my investing decision making at all.  While we will have them in the greater Middle Tennessee area every couple years, as long as you have the insurance, you should be fine. I do know that I did not have to buy a separate tornado policy for my own home, and that any damage is covered by my homeowners policy.   

If I were in your shoes, I wouldn't worry about potential tornadoes here.  Your syndication GP should have the right amounts of insurance, although you might want to follow up with him if it is still a concern.  

@David S.

I live in Murfreesboro. This market is about 30 to 45 minutes from downtown Nashville - and lots of people from here commute to there. While the rents here aren't quite as steep as in Nashville - there are very few rentals available. Any new apartments being built still can't keep up with the demand.

I would highly recommend Murfreesboro as a place to invest. There are also local economies - university(MTSU), Nissan plant, big medical center, that can limit a downturn.

The quick move-in definitely can make an impact.  I would just be careful on the end.  I know students with parents that cosign can be pretty good tenants.

Where is your house?

If you want to do it, just make sure you get a definite move-out date and what you expect to have left in what condition.  Also, does your potential July tenant have pets as well?

@Jamie Jones

I know from personal experience that it is the vacancy that will kill you. Anyway you can minimize that is key.

@Jamie Jones

One of the biggest issues I see is if the extra rent - $800 total? would cover the extra couple weeks of vacancy. And you would have to have it cleaned and so you would have some vacancy since there are dogs. Probably doesn't cover the period of time that it might be vacant. Although in my experience, you can rent things really fast in Murfreesboro, especially if you allow pets.

If I am raising money from investors, do I need a lawyer and securities broker?  I am planning on setting up an LLC for a new-build project, and I have talked to one lawyer who was thinking I would need to get a securities broker or a lawyer well versed in securities law.  
All investors are sophisticated with at 50k minimum investment, and since I have personal relationships with all of them, and I won't be advertising this publicly, they won't need to be accredited (that is my understanding).  While I am planning on using a lawyer to set up the LLC, they will do that for less than $1,000, but I was told that involving a lawyer with securities experience would cost $10,000+.  (That number came from another lawyer- so I don't know how accurate it actually is).  But the biggest cost I can see would be having to get a securities broker involved.