Nashville Skyline_2600x1000_remax website.jpg
house-window-flowerpots.jpg
stairs-home-loft-lifestyle.jpg
Abandoned-building-needs remodel.jpg
Nashville Skyline_2600x1000_remax website.jpg
house-car-vintage-old.jpg
marketing-man-person-communication.jpg
construction-work-carpenter-tools.jpg
Nashville Skyline_2600x1000_remax website.jpg

Real Estate Investors


Real Estate Investors

SCROLL DOWN

Real Estate Investors


Real Estate Investors

Investing in the Nashville real estate market?

It is no secret that real estate is a go-to industry for investment.  Not only does it allow you to earn passive income from rental payments, there are numerous tax benefits as well. 

Maslow's hierarchy of needs places shelter as one of the most basic needs every human requires. In my opinion, this reason alone is enough motivation to invest in real estate over other typical avenues like stocks, bonds, mutual funds.  Make no mistake, I believe investors should be well diversified, but real estate should be a big part of everyone's investment portfolio.  Scroll down to review the different methods of real estate you can find in Nashville.

 

Property Management

Investment Property

Flipping Houses & Fixer-Uppers

Foreclosures & Auctions

Vacation Homes

Real Estate Investor FAQs

More Investor Resources

 

house-window-flowerpots.jpg

Property Management


Property Management

Property Management


Property Management

Jonathan Berry: Property Manager

If you decide to seek help with managing all or part of your rental property, here is how I can help:

Find the right investment property:

You have to start somewhere and buying an investment property is typically where you begin. 

If you want to receive regular updates for investment properties that are new to the market just click the button below to complete the email alert form.

Find the right tenants for your rental property:

 

Already have your rental property?  I can fill it with qualified tenants. I will photograph your property, market it to the Nashville rental market, draw up a lease, accept applications, run credit and background checks and show your property. 

Once I have found your new tenants, I will meet them for the walkthrough and document your property's condition. I will accept security deposits and store them according to Tennessee Security Deposit Law.   

Manage the day-to-day tasks:

 

Already have a tenant but tired of the day-to-day tasks associated with managing rentals?  I can take over these tasks and handle any maintenance and repair issues, rental payments, late fees and deposit your rent directly into your account.  Just sit back and enjoy the benefits of owning investment property. 

Manage the eviction process:

 

Have a problem tenant but don't want to have that awkward conversation? If your tenant is always late on rent, destructive to your property or a nuisance to the neighbors I can manage the eviction process for you. The eviction process can be a lengthy one but can be worth the expense to get highly qualified long-term tenants in your property.  I will also oversee the turnover process as well (clean up, painting and readying your home for the market again). 

Being a landlord in Nashville

Owning and managing rental properties can be very rewarding, but many real estate investors find it to be time consuming and too much legal responsibility.  Aside from purchasing the rental property, landlords can expect the following:

 

  • Landlord Insurance
  • Provide habitable housing
  • Marketing the rental
  • Showing the property
  • Finding qualified tenants
  • Background checks
  • Drawing up a lease
  • Make proper disclosures
  • Collecting rent
  • Follow rent rules
  • Abide by discrimination laws
  • Documented communication
  • Regular maintenance
  • Plan for large repairs
  • Security deposit itemization
  • Deal with evictions
stairs-home-loft-lifestyle.jpg

Investment Property


 

Investment Property

Investment Property


 

Investment Property

WHAT is investment property

Real property (or real estate) purchased for the sole purpose of earning an return on said investment.  This can be attained either through rental income or capital gains via selling a property.  Investment property can either be a long-term endeavor, short-term or a combination of both.  Long-term investments (utilizing the buy and hold strategy) typically entail rental management.  You purchase a property and rent it out allowing the tenants to pay the mortgage, taxes, insurance and repairs. Rental property can either be short-term (1+ year lease) or short-term (Air-BnB or Vacation Rental by Owner, VRBOs,  nightly to monthly rentals).  Rental markets change as often as housing market so at some point it might make more financial sense to sell your short-term rental or convert your long-term rental into a short-term rental. 

 

WHY own investment property

Diversification! Ever heard the phrase, "Don't put all your eggs in one basket"? Of course you have.  In my opinion, that is the number one reason to invest in real estate.  Stocks are great, mutual funds are wonderful and there is also a place for a beefy savings account, but investing is all about leverage. Owning real estate can allow you a lot of income producing opportunities.  

OK, I may be over simplifying things here, but the point is - every needs a home.  You must run the numbers and finding a 'good deal' is the tricky part, but renting for the short-term or long-term or buying a house to flip there is some big money in it if you do it right!

 

WHO can own investment property

The short answer is "anyone". But here are a few unsuspecting types of investment property owners and landlords:

First Time Home Buyers

If you live by yourself you can get roommates who can pay rent directly to you allowing you to live rent-free!  If you own a 3 bedroom, 2 bathroom house with a $1000/mo mortgage, charge $500/mo rent and your roommates are now paying your mortgage.  Even if you only have roomies for 3 years, that allows you to save $36,000 and you still have 3 years of equity built up in your home.  Friends are the best roommates, but make sure you still have them sign a lease. Contact me if you need help with this process. 

Maybe you like your personal space too much for roommates.  Can you add a 2nd entrance to your home with minor remodeling?  Install a kitchenette and rent out to a student. There are a lot of potential renters out there - just because you need a full-sized kitchen to be happy does not mean everyone wants the same amenities. If that will not work for your home consider investing in a duplex or triplex.  You can live in one side and rent out the other.  Keep up with maintenance on both units and when you decide to sell, if you price it right, it should move quickly. Multifamily units are often times the easiest way for someone to become a landlord and real estate investor and start earning passive income.

Upsizers & Downsizers

So you are starting a family and will quickly outgrow your house and it is time to start the property search.  Do you HAVE to sell your house to buy the next one? Nashville is growing at an astounding rate and in turn property values are increasing at a similar clip.  It may be possible for you to do a cash out refinance or get a home equity line of credit on your current home and use the proceeds for a downpayment to buy a second home.  Convert your first home to a rental property and let your tenants pay your mortgage while you put away funds for future repairs. You may not make much monthly income on your first rental while you are still paying a mortgage, but real estate investing is all about the long term. Just wait until you've paid off your mortgage! Whenever you have tenant turnover you can have your REALTOR run a comparative market analysis to see if it is beneficial to sell given the current market. 

Empty Nesters

Do you have a child in college out of town?  Does your student live off campus? Are you looking for a real estate investment avenue?  Co-sign on a house with your child and let them get roommates who will pay down the mortgage for you.  My recommendation is do NOT spoon feed this to them. They will not take care of the property as well as you like. Make them put their portion of monthly rent into a separate account only touched for maintenance and major repairs. Then make them coordinate the repairs.  This gives your child an understanding of home ownership and sets them up for "real life" when they finally get that degree. 

 

WHERE to buy investment property

Near universities:

Belmont  |  Hillsboro Village  |  Music Row  |  Downtown  |  West End  |  12th South

PROS: These houses will be easy to fill at certain times of year and there will always be a need for housing near universities.

CONS: Can be higher turnover and likely to need more repairs and maintenance between tenants.

 

In walkable communities:

The Gulch  |  Downtown  |  Mid Town  |  West End  |  12th South  |  sobro

PROS: Best option for short-term rentals (ie. Air-BnBs, VRBOs, monthly rentals), highly sought after, property values are near guaranteed to increase.

CONS: Hard to find good deals and if you find a 'good deal' it is likely it will need a lot of updating or rehabbing. 

 

In popular neighborhoods:

East Nashville  |  Green Hills  |  west meade  |  Brentwood  |  Creive Hall  |  Belle Meade  |  

PROS: These highly desired neighborhoods will always have a lot of buyers. Typically easy to find renters who cannot afford a mortgage.

CONS: You will pay top dollar for these properties and can be the riskiest investment depending on when you purchase vs. when the housing market takes a downturn.

 

In up-and-coming neighborhoods:

Woodbine  |  Donelson  |  Wedgewood houston  |  madison  |  hermitage  |  Old Hickory

PROS: Best place to find good deals and ypically more homes for sale in these areas that are not as competitive as other areas allowing more room for negotiation.

CONS: The best deals may need a bit of work so you either need cash on hand or a rehab loan. May take awhile for these neighborhoods to appreciate in value, but when they do say "hello" to equity! 

 

WHEN to buy investment property

As we all know, the Nashville housing market has cycles.  Typically winter is slower giving buyers more buying power and making it tougher for sellers to sell.  Conversely, summer is busier making it easier for homes to sell faster and more difficult for buyers to get a good deal.  With that said, the best time to invest in real estate is WHEN YOU FIND A GOOD DEAL!  

If you are looking for a home that is turnkey ready and waiting on a tenant you will need to pay more attention to housing cycle. If you plan to buy a seriously distressed property for cash it might be just as easy in summer as it is in winter.  Your best bet is to talk to a licensed Realtor, mortgage lender and title attorney to run the numbers on your potential income.  

 

Abandoned-building-needs remodel.jpg

Flipping Houses & Fixer-Uppers


Flipping Houses & Fixer-Uppers

Flipping Houses & Fixer-Uppers


Flipping Houses & Fixer-Uppers

Flipping Houses and Fixer-Uppers:

Is it smart to even consider a fixer-upper?

It depends. Distressed properties or fixer-uppers can be found anywhere, even in wealthier neighborhoods. Such properties are poorly maintained and have a lower market value than other houses in the neighborhood.

Many experts recommend that before you make such an investment, first find the least desirable house in the best neighborhood. Then do the math to see if what it would cost to bring up the value of that property to its full potential market value is within your budget. If you are a novice buyer, it may be wiser to look for properties that only need cosmetic fixes rather than run-down houses that need major structural repairs.

 

Is there a tax break for a fixer-upper house if it is considered historical?

Qualified rehabilitated buildings and certified historic structures currently enjoy a 20 percent investment tax credit for qualified rehabilitation expenses. A historic structure is one listed in the National Register of Historic Places or so designated by an appropriate state or local historic district also certified by the government.

The tax code does not allow deductions for the demolition or significant alteration of a historic structure.

The U.S. Department of Housing and Urban Development's Section 203 (K) rehabilitation loan program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.

The 203(K) loan is usually done as a combination loan to purchase a fixer-upper property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.

Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.

For a list of participating lenders, call HUD at (202) 708-2720.

If you are a veteran, loans from the U.S. Department of Veterans Affairs also can be used to buy a home, build a home, improve a home, or refinance an existing loan. VA loans frequently offer lower interest rates than ordinarily available with other kinds of loans. To qualify for a loan, the first step is to apply for a Certificate of Eligibility.

 

Are there special loans for fixer-uppers?

If you need a home loan to buy a "fixer-upper" and remodel it, look at the U.S. Department of Housing and Urban Development's Section 203(K) loan program. The program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.

A 203(K) loan is usually done as a combination loan to purchase a "fixer-upper" property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.

Investors must put 15 percent down while owner-occupants are required to come up with only 3 to 5 percent. HUD requires that a minimum of $5,000 be spent on improvements.

Two appraisals are required. Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.

 

What are building codes?

Building codes are established by local authorities to set minimum public-safety standards for building design, construction, quality, use and occupancy, location and maintenance. There are specialized codes for plumbing, electrical and fire, which usually involve separate inspections and inspectors.

All buildings must be issued a building permit and a Certificate of Occupancy before it can be used. During construction, housing inspectors must make checks at key points. Codes are usually enforced by denying permits, occupancy certificates and by imposing fines.

Building codes also cover most remodeling projects. If you are buying a house that has been significantly remodeled, ask for proof of the permits involved before you purchase to avoid future liability for fines.

 

How do I find a good contractor?

While hiring contractors recommended by friends is usually a safe route, never hire a construction professional without first checking him or her out. If your state has a licensing board for contractors, call to find out if there are any outstanding complaints against that license holder. Also, call your local Better Business Bureau to see if there are any complaints on file.

If you are satisfied with the answers you find there, interview the contractor candidates. Ask what kind of worker's compensation insurance they carry and get policy and insurance company phone numbers so you can verify the information. If they are not covered, you could be liable for any work-related injury incurred during the project. Also be sure that the contractor has an umbrella general liability policy.

If they pass the insurance hurdle, next check some of their references. A good contractor will be happy to provide as many as you want.

Finally, don't let yourself be rushed into making a decision no matter how competitive the market may seem. Also, never pay a deposit to a contractor at the first meeting. You may end up losing your money.

 

Is remodeling worth the price and time?

Remodeling magazine produces an annual "Cost vs. Value Report" that answers just that question. The most important point to remember is that remodeling a home not only improves its livability for you but its "curb appeal" with a potential buyer down the road.

Most recently, the highest remodeling paybacks have come from updating kitchens and baths, home-office additions and extra amenities in older homes. While home offices are a relatively new remodeling trend, for example, you could expect to recoup 58 percent of the cost of adding a home office, according to the survey.

 

How do I look for fixer-uppers?

You can find distressed properties or fixer-uppers in most communities, even wealthier neighborhoods. A distressed property is one that has been poorly maintained and has a lower market value than other houses in the immediate area.

Ascertaining whether the property you're interested in is a wise investment takes some work. You need to figure what the average house in a given area sells for, as well as what the most desirable houses in that area are like and what they cost.

Some experts suggest that buyers who take this route try to find a "cosmetic fixer" that can be completely refurbished with paint, wallpaper, new floor and window coverings, landscaping and new appliances. You should avoid run-down houses that need major structural repairs. A house price that looks too good to be true probably is. A smart buyer will find out why before buying it.

The basic strategy for a fixer is to find the least desirable house in the most desirable neighborhood, and then decide if the expenses needed to bring the value of that property up to its full potential market value are within one's rehab budget.

Nashville Skyline_2600x1000_remax website.jpg

real-estate-home-investors-nashville-realtor-jberryagent


Foreclosures & Auctions

real-estate-home-investors-nashville-realtor-jberryagent


Foreclosures & Auctions

Foreclosures & Auctions:

 

Are foreclosures a good investment?

A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Many people lose their homes due to job loss, credit problems or unexpected expenses.

It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.

 

Are there different types of foreclosures?

Judicial foreclosure action is a proceeding in which a mortgage, a trustee or another lien holder on property requests a court-supervised sale of the property to cover the unpaid balance of a delinquent debt.

Non-judicial foreclosure is the process of selling real property under a power of sale in a mortgage or deed of trust that is in default. In such a foreclosure, however, the lender is unable to obtain a deficiency judgment, which makes some title insurance companies reluctant to issue a policy.

 

How do I find a foreclosed property?

In most states, a foreclosure notice must be published in the legal notices section of a local newspaper where the property is located or in the nearest city. Also, foreclosure notices are usually posted on the property itself and somewhere in the city where the sale is to take place.

When a homeowner is late on three payments, the bank will record a notice of default against the property. When the owner fails to pay up, a trustee sale is held, and the property is sold to the highest bidder. The financial institution that has initiated foreclosure proceedings usually will set the bid price at the loan amount.

Despite these seemingly straightforward rules, buying foreclosures is not as easy as it may sound. Sophisticated investors use the technique so novices may find themselves among stiff competition.

 

How does HUD affect my buying a foreclosure?

If you are strapped for cash and looking for a bargain, you may be able to buy a foreclosure property acquired by the U.S. Department of Housing and Urban Development for as little as $100 down. With HUD foreclosures, down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from 5 to 20 percent. But when the property is FHA-insured, the down payment can go much lower. Each offer must be accompanied by an "earnest money" deposit equal to 5 percent of the bid price, not to exceed $2,000 but not less than $500.

The U.S. Department of Veterans Affairs also offers foreclosure properties which can be purchased directly from the VA often well below market value and with a down payment amount as low as 2 percent for owner-occupants. Investors may be required to pay up to 10 percent of the purchase price as a down payment. This is because the VA guarantees home loans and often ends up owning the property if the veteran defaults. If you are interested in purchasing a VA foreclosure, call 1-800-827-1000 to request a current listing. About 100 new properties are listed every two weeks.

You should be aware that foreclosure properties are sold "as is," meaning limited repairs have been made but no structural or mechanical warranties are implied. You can only purchase a U.S. Department of Housing and Urban Development property through a licensed real estate broker. HUD will pay the broker's commission up to 6 percent of the sales price.

 

Where do you find government foreclosed homes?

The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD. These properties are available for sale to both homeowner-occupants and investors. You can only purchase HUD-owned properties through a licensed real estate broker. HUD will pay the broker's commission up to 6 percent of the sales price. Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from the conventional market's 5 to 20 percent.

Buying a foreclosure property can be risky, especially for the novice. Usually, you buy a foreclosure property "as is," which means there is no warranty implied for the condition of the property (in other words, you can't go back to the seller for repairs). The condition of foreclosure properties is usually not known because an inspection of the interior of the house is not possible before the sale. In addition, there may be problems with the title, though that is something you can check out before the purchase. Buying directly at a legal foreclosure sale is risky and dangerous. It is strictly caveat emptor ("Let the buyer beware").

The process has many disadvantages. There is no financing; you need cash and lots of it. The title needs to be checked before the purchase or the buyer could buy a seriously deficient title. The property's condition is not well known and an interior inspection of the property may not be possible before the sale. In addition, only estate (probate) and foreclosure sales are exempt from some states' disclosure laws. In both cases, the law protects the seller (usually an heir or financial institution) who has recently acquired the property through adverse circumstances and may have little or no direct information about it.

 

Can I get financing on a foreclosure?

One reason there are few bidders at foreclosure sales is that it is next to impossible to get financing for such a property. You generally need to show up with cash and lots of it, or a line of credit with your bank upon which you can draw cashier's checks.

 

What are trustee sales?

Trustee sales are advertised in advance and require an all-cash bid. A sheriff, a constable or lawyer acting as trustee usually conducts the sale. This kind of sale, which usually attracts savvy investors, is not for the novice.

In a trustee sale, the lender who holds the first loan on the property starts the bidding at the amount of the loan being foreclosed. Successful bidders receive a trustee's deed.

house-car-vintage-old.jpg

Vacation Homes


Vacation Homes

Vacation Homes


Vacation Homes

Are vacation homes a good investment?

You can buy a vacation home today for investment purposes as well as enjoyment. And yes, there are tax benefits.

Some people buy a vacation home to use as a permanent retirement home later, which allows them to get ahead on their payments. Another benefit is that the interest and property taxes on a vacation home are tax-deductible.

Some real estate experts predict that vacation homes will appreciate in value due to rising demand from the aging Baby Boom generation. You also can depreciate the property if you live in the house less than 14 days a year.

You also need to consider whether you can afford to carry two mortgages, pay for the extra utilities and maintenance costs, and how this investment fits into your total personal finance picture.

marketing-man-person-communication.jpg

Real Estate Investor FAQs


Investor FAQs

Real Estate Investor FAQs


Investor FAQs

Investor Frequently Asked Questions:

Investor FAQ #1: What is the difference between condos and single-family homes?

Investor FAQ #2: How do homeowners associations work?

Investor FAQ #3: Is it difficult to project rents on rentals?

Investor FAQ #4: Will buying a bigger home increase my profit?

Investor FAQ #5: Are there government programs for rehabilitation?


 

Investor FAQ #1: What is the difference between condos and single-family homes?

 

Using appreciation as a measure, condominiums in some areas have been as profitable an investment as single-family homes in the past five years. And in some markets, condos appreciated even more, according to some experts.

While single-family homes have been the preferred investment by homebuyers, changing demographics are helping make condos more popular, especially among single homebuyers, empty nesters and first-time buyers in high-priced markets.

Also, the condominium community has worked hard in the last few years to overcome image problems brought on by homeowners association and developer disputes as well as all too frequent construction-defect litigation.

 


 

Investor FAQ #2: How do homeowners associations work?

 

Learn everything you can about the homeowners association before you buy into a development governed by one. The association's financial, political and legal conditions are very important to your investment and quality of life.

When run properly, homeowners associations maintain the common grounds and keep civility in the complex. If you follow the rules, the association should not intrude on your privacy or cost you too much in association dues.

Poorly managed associations can drag down property values and make living there difficult for residents. Start by studying the association's covenants, codes and restrictions, or CC&Rs, and find out if you can live by them. For example, if the rules prohibit loud music after a certain hour and you like to play your CDs late at night, this may not be the place for you. Don't move in thinking you can get away with violating the rules or change them later because you may find yourself in turmoil with determined neighbors firmly in control of the association board.

Find out all you can about the association's finances. Beyond reviewing the budget, talk to the association treasurer and find out if dues are expected to increase and if any special assessments are planned. Ask if special inspections have revealed problems with roofs or plumbing that may cause a dues hike or special assessment later on.

Call and meet with the association president. If you are the type of person who despises intrusions into your private life and the president seems more interested in gossip about the residents than maintaining the property, this may not be the right condo complex for you.

Speak with residents to get their views on the association's finances, its property manager, how it operates and any politics. Associations are volunteer organizations with elected boards, like a mini-government, so politics can enter the picture and spoil a good thing.

Lastly, take some time to understand how homeowners associations are organized and how they conduct business. Like all real estate investments, the more you know the better off you are.

 


 

Investor FAQ #3: Is it difficult to project rents on rentals?

 

If you are buying a rental income property and applying for a loan to do so, the lender will require an area rent survey by a certified appraiser. The amount a landlord can expect to receive in monthly rent largely depends on what the property has rented for in the past, the condition of the building, its location and the current housing market.

Lenders also look at other cash-flow considerations. They want to know if you have enough reserves on hand to cover predictable and unforeseen expenses, such as property insurance, taxes, regular maintenance and repairs.

 



Investor FAQ #4: Will buying a bigger home increase my profit?


Consider these questions before making a choice between adding on to an existing home or moving up in the market to a bigger house:

  • How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
  • How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
  • What do local zoning and building ordinances permit?
  • How much equity already exists in the property?
  • Are there affordable properties for sale that would satisfy housing needs?

Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value.



 

Investor FAQ #5: Are there government programs for rehabilitation?

 

The U.S. Department of Housing and Urban Development's Section 203 (K) rehabilitation loan program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.

The 203(K) loan is usually done as a combination loan to purchase a fixer-upper property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.

Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.

For a list of participating lenders, call HUD at (202) 708-2720.

If you are a veteran, loans from the U.S. Department of Veterans Affairs also can be used to buy a home, build a home, improve a home or to refinance an existing loan. VA loans frequently offer lower interest rates than ordinarily available with other kinds of loans. To qualify for a loan, the first step is to apply for a Certificate of Eligibility.

Another program is the Federal Housing Administration's Title 1 FHA loan program.

 


construction-work-carpenter-tools.jpg

More Investor Resources


More Investor Resources

More Investor Resources


More Investor Resources