All Forum Posts by: Waylen Herdman

These two deals are located in Clarksville, TN and I'm having trouble deciding which deal I should opt for (If my offer is accepted of course).

FIRST DEAL:  Duplex (2/1 each side)

Asking price - $77,500 in a D or C neighborhood (Offered 74k and they pay 1/2 closing costs).

Will probably need 5k - 7k in rehab.

ARV Probably $80k - $85k.

I was approved for a 3% conventional loan. At first I was planning on house-hacking with an FHA loan but now I'm thinking I'll just rent it out as I have better job opportunities where I currently live (Franklin, TN).

One side has been renovated while the other has not and I have yet to see it. The tenant is being evicted and supposed to be out this month (I have three contingencies: Seeing the other unit, tenant is vacated and inspection).

I believe once the other side is renovated I can bring in ~$600/side, so ~$1200.

I received a cost estimation with my pre approval letter of 85k which has my PITI as ~$650 so I'll use that. I'll also use 50% of PITI for operating costs (~$325).

$1,200 Rent - $975 = $225 Cash flow.

Bottom Line: The cash flow is definitely superior in this deal but my biggest worry is definitely the class of tenants this property would attract. I also have little opportunity to force appreciation unlike my second deal.

SECOND DEAL: SFH (2/1)

Asking price - $60,000 in a B neighborhood (Touring the property tomorrow)

Will probably need 7k - 12K in rehab.

ARV probably around 85k - 100k.

Since I was approved for a conventional loan I started looking at distressed SFH and this deal popped up. It's only been on the MLS for a day.

The property is distressed but from the photos, honestly just looks dirty and unkempt. I'll have a better gauge tomorrow once I step foot in the house. The house is located in a better area of Clarksville and when I look at Zillow, there are no houses under 100k within a mile vicinity.  Houses with similar Sq footage are 100k - 130k (but most have 3 beds). It also has a 20x30 detached garage/workshop which seems like a great sell to a future tenant. 

I believe I can bring in $750 - $900/month.

My PITI will probably hover around ~$550 (This may be a little high) and adding 50% as operating costs we come to a total of: $825

$900 Rent - $825 = $75 cash flow.

Bottom Line: I can force considerable more appreciation in this house and the refinance and take all my money out and repeat. I also think I can have a much better tenant in this property as opposed to the first deal.

They both seem good but for different reasons. I would love to get Bigger Pockets take on these deals and if I should pull the trigger on one or wait for a better deal to pop up. I probably missed quite a bit of information so if I did, just let me know and I can answer as best I can.

The company I work for is based in Nashville and we charge 20%. Keep in mind the owner still has to pay for lawn maintenance, utilities, cable etc... Out of the 80%.

We've all heard of the big dog tourist destinations like Myrtle Beach/Smokies/Miami/Destin/Pensacola/Nashville etc.... but what are some not so well known tourist destinations that may make a big splash in 5-10 years? I've heard and agree that Louisville, KY has the vibe of Nashville 10 years ago and some of us know the Nashville STR market is BOOMING right now. I may be a little bias because I work as a STR PM here in Nashville :).

What smaller cities do you think have a chance to becoming a decent area for STR in the not so distant future?

@John Williams Not as well as I should to be honest. I have had a few co workers from Clarksville and they all said that generally speaking: North of APSU is generally the more crime ridden area as opposed to the South of APSU which is more affluent. Someone from Clarksville may chime in and refute this but I've heard this from 3 people so far.

@John Williams Unfortunately I don't have any insight to add regarding your question but moving to Clarksville is in the works for me as well. Where in Clarksville are you looking at?

@Lucas Carl 

I'm assuming you're based in Nashville and self manage from there. That's impressive... I work for a STR property management company here in Nashville. The amount of times I have to make last minute trips to Nashville because of broken A/C units or my favorite, cobwebs on the porch that the guests don't feel comfortable knocking them down is mind boggling. What do you do if you receive a message at midnight expressing that the A/C went out it and is too hot and muggy for them to sleep? Do you send someone out ASAP or give them a partial refund?

I remember reading another one of your posts a few months back explaining why you chose the Gatlinburg/Pigeon Forge area, because the economy  in that area revolves around tourism so you know you won't be royally screwed over by regulations or the recession. That being said, do you see yourself investing anywhere else in Tennessee, Nashville or Knoxville perhaps? 

Once I got in to the STR business I knew I wanted to stay here, not only because it's a gold mine but I think the idea of owning Vacation Rentals is rad!

While I would love to buy my first STR in the Pigeon Forge area it is too rich for my blood at this point in my life. I have been thinking of buying a property in Clarksville and marketing it more as a corporate or military rental and if that didn't pan out I would LTR individual rooms to APSU students. Would you think this is a solid idea or more of a "wouldn't touch it with a ten-foot pole?"

I want to preface this by saying that this scenario is purely hypothetical. Let's say I use FHA financing for a 3/1 SFH. Obviously I have stay in the property for a year but do I have to stay in the property or could I stay on the lot? I ask this because my idea is renting out a house by bedroom to college students (I'm young enough where I don't think it would be awkward if I stayed with college students) and rent all the bedrooms in the house and either: 1) Stay in a small room in the house that may not technically be a bedroom or 2) Stay in my 15' commercial canvas tent in the backyard. Yes - it's a gnarly idea but I have my own stove burner so will stay ~75 in the Winter. Crazy idea, I know, maybe that's why I'm so attracted to it! :) Would this be considered mortgage fraud if I went either of these routes? Also - this may be a question better suited to the Tennesseans as it involves the THDA down payment assistance but I imagine several states Ave something similar. It's said that with the THDA down payment assistance you can't rent the property but does this mean the whole property or can individual bedrooms be rented out if it's an owner occupant? Thanks for the responses!

@Mike Carr

What are you looking for in a facility?  You'll have to keep me informed when you do finally buy a facility! Every few days I'll look on loopnet for self storage facilities, some of them are surprisingly/suspiciously cheap. Are you primarily looking in Deleware/ surrounding states or?

Also did your facility use Sitelink? If so do you have any SL tips? :) I've been showed quirks in SL that are tremendously helpful.

@Mike Carr

I'm definitely going to check that program out.

I noticed your bio mention about how you started working in self storage to learn the inn and outs, do you still work there? Do you currently own any Self-Storage facilities yet?