All Forum Posts by: Taylor Ferrell

@Maxwell Wuensch and @Kurt Snyder thank you for your input on this. I'm under contract for an 8plex that has a non-functioning common laundry area. Each unit does not have their own hook-ups so the tenants are currently having to use offsite laundromats. I am trying to figure out a solution to get the space up and running again to add an additional amenity for the tenants along with revenue stream for the property. 

@Dj Olhausen welcome to Sumner County!! Are you based in Hendersonville?

There is certainly a strong rental market and demand in the area, as Gallatin has recently added several large apartment complexes and just approved a few others. However, like in many other cities the list prices on the MLS are well over what an investor can typically purchase the property for as a buy and hold.

If you are looking to connect with others in this market I would recommend checking out REIN (real estate investors of Nashville).

@Michelle Bulich When I first started looking for investment properties in 2012 I passed on one in a really good part of Nashville that was $128,000. At the time it was already $200,000 less than every house on the street, and while it needed some serious updating it was not the scope of work that gave me pause. 

Almost every surface inside was covered in disturbing crayon drawings and strings of numbers. The kitchen floor had a giant hole looking down into the basement allowing a foul odor to rise. The house was vacant and all utilities had been turned off, but even though it was the middle of summer the house was freezing. Additionally, the yard had probably 10-15 trees, and every single one was clearly dead. I could not get out of that house quick enough. 

If that same house was available today, at those prices, I would purchase it in a heartbeat. Builders are buying houses in that neighborhood now for $350,000- $400,000 just for the land. 

Good luck with whichever direction you decide to go! 

What does a FAIR but GOOD DEAL with seller financing look like in today’s economy?

In the past I have used conventional financing for purchasing investment properties, and would appreciate any guidance from those that have done seller financed deals. While I understand that just about any terms “can be negotiated”, I am trying to get a good sense of what a realistic and fair deal to both parties would look like today.

Scenario: A local 80-year-old real estate investor is looking to retire, and is starting to sell off properties. He recently sold one in January to a local flipper (not me) for $166,000. The flipper put in $25,000 to get it rent ready and sold it for asking price of $250,000, on day one. The market rent for these properties is around $1250 per side.

He has sold off almost all of his portfolio over the last 4 years, but still holds four more duplexes. I would be interested in purchasing three of them that are in the same neighborhood as the above mentioned property. While the seller is ready to retire from being a self-managed landlord, he is not sure he wants to sell them yet because he still likes getting some monthly income, and wants to spread out his taxes. These units are currently being rented for $700-$800 each, but comps support $1250.

I am trying to determine if there is a potential deal I can take to the seller utilizing seller-financing that accomplishes his goals, and is still a good investment. I am looking to buy and hold, but am happy to refinance to conventional loans as he is ready.

Paying him close to what he makes a month in rent off each unit as the “mortgage” does not leave enough to cover expenses (capex, vacancy, taxes, insurance, etc.) and still have any real cash flow, so I have eliminated that as an option.

I appreciate anyone’s insight on how I might could structure this. Alternatively, do you think the best option is to just wait until he is ready to sell them, and purchase each of them one at a time over the next couple of years? 

Even if you think the best option is to wait, I would still love to get your feed back on what is "standard" in today's economy for seller financing. 

@Account Closed I love the story of purchasing your home. Do you happen to have a copy or recall roughly what the letter said you left in the box with the gentleman? I'm looking at reaching out to a 90 year old lady who owns several duplexes, and most suggestions I have found so far are more form style letters. I think a personal touch is probably better in this situation. Thank you in advance, - Taylor 

@John K. Great sites and examples. I have used many of these myself.

@Joshua Ferguson It can get overwhelming in learning how to use excel efficiently, so I would suggest to first build something applicable to your everyday life right now. You don't have to master the programs, just learn how to make it work for you, and know the steps necessary to find a better way to do it next time. 

Since you said you are a few years away still, I would suggest try setting up your own income and expense statements, track your monthly spending, etc. Learn and write the formulas that will allow you create a nice "overview page" within the workbook.  It is essentially a blank canvas to create a platform that works for you.

In my day job (non real estate) we get on average 15 interns a year. Most of them with good college degrees and great resumes, but very few of them are ever proficient in excel. I require that they all learn how to do mail merge, even if it that application is not something they will likely need in their role.

I found that learning how to manipulate large cells of data and converting it into a practical use (mailing letters, creating labels, call sheets), forces them to learn not only the basic steps in the process, but also how to think outside the spelled out directions you can find on the internet. Anyone that has ever done a mail merge to thousands of households knows you do not want to have to set it up each time from scratch. 

@Michael Ealy my realtor is looking into the environmental issues, and if there are any rules or laws that apply to this property. Purchasing it is certainly an option if we could get them to agree and the numbers work. 

There are 13 houses on the street and 9 of them are duplexes. One duplex has been flipped recently, but the other 8 are pretty outdated. The SFH on the street (minus the hoarder house) are well maintained and/or in the process of being flipped. I am working on trying to identify who owns and get contact information for each of the duplexes. This street is truly a overlooked pocket in a very nice part of town in a great school zone.

@Dave G. It looks like their property taxes have been paid in full every year except 2018, however they are not yet listed as delinquent with the county. I'll keep an eye on this for sure.

@Scott Mac That is a good idea to try resolving during due diligence, and walking if it can not be done. Based off of the outside decor I believe they are probably an older person/ couple. The deal is potentially good enough that I would gladly rent a dumpster and people to clean up their yard. Its not just junk piles, there are actual mounds of trash bags in the back and side yard. 

Since the property is in the county and not the city there is no municipal trash service. Most of the houses on the street have a specific trash can that a private company provides as a contract service to pick up their weekly trash. 

This property does not have this trash can, and I am guessing they are not paying for this service. Instead they have essentially turned their back yard into a landfill. 

Thank you both for the ideas. 

@Brandon Sturgill a bulldoze would likely be the best option. Haha. 

Most counties in Tennessee have codes that are very favorable to property owners, and place very few regulations on the condition of the land. Some cities however have created much more stringent codes to address these issues. This property's address is in one of these cities, but since it is just outside of the city limits their codes enforcement is unable to take action. 

I'll look into state environmental rules. Thank you! 

I am looking at a duplex to purchase in a good part of town. The owners have been trying to sell the property for 3 years.

Even with the massive repairs the duplex needs, the numbers work based on rents for similar size units just down the street after we rehab the property.

The biggest hurdle is the next door neighbor's house (not a rental) is on a corner lot that you have to drive past to get to the duplex. There are mounds of trash and piles of junk all over the yard. This property is in the county and not the city. It is not part of an HOA. These homes are all close together, and to get the quality of tenant, at the price point the area dictates I am concerned will be difficult with this next door.

Has anyone dealt with this situation before or have recommendations on how to get the house next door cleaned up?

Thank you.