All Forum Posts by: Sean Davidson

I'm with Luka, it is still a strong market, but we are absolutely leveling off. Prices overall are pretty much flat (although individual neighborhoods are still gentrifying) and supply has finally started to increase. Our products under 400 still move very quickly with multiple offers sometimes, but over 400 is a lot tougher market than it was 2 years ago. Still plenty of opportunities out there, I think it is just starting to move toward a more reasonable balance between buyers and sellers. Local factors are all still strong, but interest rates do make a difference at every price point. 

Not a lot of older MFH in the city, not really sure why it developed that way. We used to do BRRRs, then flipped some, then did infill new construction, and basically we have watched the margins get squeezed on all of those over the years, especially if you are trying to do a lot. We are now focused on building more affordable infill townhome communities. There is always opportunity in every market, you just have to be willing to listen to what the market is telling you and adapt. If you would prefer to get really good at one strategy, and then move around the country plugging it in where it fits, then that works too. In that case, I think there are better markets for cash flow investing than Nashville. Just my 2 cents.

If you can find a small, reasonably priced multifamily in that area, then more power to you. Nashville is so full of investors right now and everything has been picked over so many times that you better have a great deal of patience and some luck. Most answers also undervalue how local real estate is. While the logic of "it has been going up, so it has to come down" is not crazy, Nashville is in an interesting and seemingly great position for growth. We have a ton of people moving here, limited housing supply, and basically no unemployment at all. While the days of not so talented developers tearing down one, building two cheap houses and selling them over asking are done, there is still a huge need for housing because there are too many jobs which bring too many people for our current housing stock. The cost of construction and the cost of land has also constricted new construction, so pricing has gone up as a result. All that to say, there are still a lot more reasons for home prices to go up in general than there are for them to go down. This crowd isn't fond of appreciation, but in a booming city it is very difficult to find good deals without thinking about it, especially in the city. Most cash flow people are in the outskirts at this point. The areas you are talking about specifically are quite different. Germantown is already really nice, so you are betting on appreciation if you can even find a decent place for that price. Buena Vista/North Nashville, you are betting on gentrification, as value is being added everyday as people pour money into the area. That is an important difference. We are building a lot in the Buena Vista area and I'm keeping as much as I can at less than the 1% rule, but I'm betting that a good location in a growing city will be worth more once the dust settles. Just my two cents of crazy risk taking to balance the traditional cash flow investing advice. 

I don't recommend it, but I know some people who have been doing it for a while with no problems. I think the concern would be if you get noise complaints called in against you and they dig into it. The penalty as stated right now is $50 per day that you violated the law, but it has to be imposed by a court, not an administrator or LEO. I haven't heard of anyone getting caught, but since airbnb has digital records of your whole history, that could in theory be used in any case the city brings against you. That would only really be painful if you had a lot of properties, though.

I've found Franklin Synergy to be the most willing and able in working with real estate investors, but word is that things are starting to slow down over there so I'm not sure if they are still as aggressive as they once were.

You don't need a permit to rent out your house for more than 30 days, but you are technically required to register with the city. You have to basically send in a piece of paper with contact information and pay a tiny amount of money every year. No approval process, just registration. 

But I'm with Devan.. if you already have a permit, I would rent that thing out on airbnb until they dragged you kicking and screaming to long term. 

REIN is the go to for rental investors - reintn.org

Nashville is pretty saturated with investors right now, and all of the buzz means people are asking stupidly high prices for their land or ugly houses. There are always deals to be found, but it seems like people are having to work harder and harder to find them... nothing is coming easy these days. There are a number of wholesalers already canvasing the good areas pretty heavily.. you may need to look outside of town depending on what you are trying to find.

Tommorrow is your chance. You can even marathon it into the Tuesday REIN meeting.

https://www.biggerpockets.com/forums/521/topics/47...

I am amazed at these construction costs - I would be utterly shocked if someone could build anything right now for 85 a foot, unless of course you are the GC and not taking any payment for your labor.. in which case you are still subsidizing a weak deal. Also, when we build townhomes what scares me most are the sprinklers. Depending on water pressure in the area or the number of units in a building, you could possibly have to sprinkle the building. This can quickly add up to tens of thousands of dollars.

We are in a hot building market right now, so prices to build are high. It is hard if not impossible to build cheap stuff right now. Maybe in the next recession it will be easier, but it is the fundamental issue with building affordable housing. I can't sell houses for 200k when it costs me 220k to build them.. so you have to build higher up the food chain where the $/sf is higher. You might be able to get away with building high end apartments right now, but as mentioned earlier, I would stick to units built when labor and materials were cheaper or a run down property that could use some lipstick.