All Forum Posts by: Rhett Kelton

I have also heard good things about Reliant. And Synergy. Now, I have not used either one, just heard good re investment things. I would highly recommend coming to the REIN meeting the third Wednesday of each month.(actually today- Jim and Nick's at 12- there is a room set aside for everyone.) There are usually a couple lenders there - between them and the other people, you can find out a lot more legit info.

Have you talked to Wilson Bank and Trust?

There are a number of other local banks that might do something like this, but I have seen at most 25-year amortization.

David,

Glad you are here!  I also live and invest in Murfreesboro.  Several things that I would think about when doing the analysis.  I think it is great that you analyzing with conservative numbers.

1. How much work/money will have to go into the property?  If it will take $40,000, make sure you account  for that .  Also, personally I am extra conservative with this number.  Cost ALWAYS seem to go over.

2. What is your cash on cash return?  I can't know exactly without know what sort of terms you are getting on your 80% mortgage.  (Amortization time is what I look at, then actual length of the loan)

3.  I don't personally look at Cap Rate until it is 5+ units.  With 1-4 units, I personally look at the monthly cash flow.  I usually insist on $100-150 per door minimum, after I take into account all my reserves (Prop Mgmt, Cap ex, Repairs, vacancy.  My monthly reserve is about 30% of rent.  Even if you do the prop mgmt yourself, I would take it into account.  You might decide to stop doing that at some point in the future.)

4.  I imagine you see this around BP a lot, but the deal is really dependent upon your investing strategy.  Buy/Hold, flip, purchase for appreciation, etc.

5.  I would analyze all your rental properties with a 5.5%-6% interest rate. 

6.  Develop the relationship with a local bank! I personally use First Vision, but Ascend, Reliant, Synergy also have good reputations. 

7.  Come to the REIN meetups.  3rd Wednesday of every month, 12PM, Jim and Nicks.  Talk to some of the investors, mortgage people, and you will get some pretty good ideas and differing opinions.

Best of luck, and hope to see you around!

@Brandon Magierowski

Two other things I thought of.

The top school zones are probably Seigel, followed by Blackman.

it might be a good idea to get a property manager's point of view as well. I know that Nathan Beach (I think it is @nathan beach, but I am on my cell phone and can't guarantee it.) works as a property manager and is familiar with Murfreesboro, and is on Bigger Pockets.

@Brandon Magierowski

As for long-term rentals, I think it is a great place. I have several houses in the downtown area where the tenants drive 45-60 minutes for work, and have been there several years. For good versus bad neighborhoods, I would look at the maps of Opportunity Zones. But even then, it can come down to individual streets.

For example, in the downtown area, the houses on Main Street can sell for 1.5+, while houses 4 streets down, like State Street, have houses for $75,000, and 100 years old.

If you see a couple units that would interest you, you can PM me the addresses and I could probably better give you a good versus bad from my local perspective.

Brandon,

I live here in Murfreesboro.  I agree with Julie above, as far as finding out more about the regulations, but locally there is definitely the desire to be different from Nashville.
Because of the growth, area's/streets close to each other can be very different. On the STR (I'm assuming something like AirBnB?) side, For STR, I would personally look around the university (MTSU) area (graduations, games, weddings, etc), or the Medical Center Pkwy area (transportation to Nashville, corporate Nissan/Amazon, medical personnel. These might be more of a 3-6 month rental?)

* My focus is not in the STR side of the business, so I can't guarantee any information. But the people I know that have invested in the STR here have been pretty successful here. They have both been in the MTSU/downtown area.

I am getting ready to buy a SFR that will likely need at least 40-50k in rehab costs. The sales price will be around 125k.
The house was originally built back around 1920.

This house is now in a commercial zone, therefore I can only legally put in (a max of) 45k in repairs if I was to keep it as a SFR. Also, I cannot convert it to any multifamily. I have only done SFR rehabs before, I am not particularly worried about the downside and am okay with a challenge if it is the right thing to do. I am not sure if I should:

1. Just knock the house down and rebuild some sort of commercial building

2. Rehab the house into some sort of small commercial office (lawyer office, small business, etc)

3. Rehab the house and keep it as a SFR.

Also, this is in an Opportunity Zone...

I've used Lawyers Land and Title a couple times. They have been fine

I agree with both above- it is all about your goal. I am also in the Murfreesboro market, and am excited about the continued growth. My personal opinion that, even through a downturn, the cost of living in Murfreesboro is much more reasonable, when compared to Nashville, and I feel Nashville offers a variety of different businesses/companies (auto/music/healthcare/education/government/tourism) so that it is not dependent on a certain stream of income. As I continue to look, I am focusing more on the small multifamily, since I think the rents for those housing can better handle a turn in the markets. In my two SFR, I have 1 with a great tenant, and 1 with a good tenant (that causes a few headaches, but I think that is more because of the age of the house). I have also found that there is definitely a strong market for the multifamily, so you might need to pay a slightly higher premium for those.

It would be great to connect sometime and talk some REI!

Sounds like a great investment!  I'm just starting to look in the Murfreesboro area- focusing on the downtown market (in the general vicinity of Central Magnet), and am always excited to see Murfreesboro real estate thriving.  Can you also let me know the address?