In August, 2014, I purchased an investment house in Nashville, TN that I found advertised on Craigslist. It was a rented single family house for sale by owner, due to a relocation out of state. I responded to the ad by email and requested the address of the property since it wasn’t stated. The address is required to move forward with any analysis, and to see if the deal is worth pursuing further. If I don’t like the location, I forget about it.
Next, I proceeded to do my usual information collection about a property. I look it up on the county tax assessor’s website to find out the lot size, square footage of the house, year it was built, zoning classification, past sales history, and appraised value. This data gives me an introduction to the property and lets me figure out the price per square foot. However, the square footage stated on the tax records is not always accurate, so it is wise to verify the actual area of the physical structure. In fact, the tax records were 600 square feet off from the actual area of my first primary residence.
The house on Craigslist had the two most important features that I am looking for in an investment property: location near a red hot neighborhood, and a cheap price tag. This house was just a couple of blocks from the historic Germantown neighborhood, and priced at only $72,000.
Our featured House of the Week is 1212 Laurel Street #1605, Nashville, TN in the structure named Twelve Twelve. Although it is technically a condo and not a house, the prime location in The Gulch and lush green rooftop may be enough to make some buyers forget they wanted a yard. The newly constructed building contains, “286 finely finished residences enclosed in 23 stories of glass,” according to its website. However, many of the units sold quickly, and only a few dozen remain available. #1605 is a two bedroom two bath unit with 1,207 square feet, priced at $581,000, which comes out to $481 per
The Monthly Housing Summary released this month by realtor.com provides data for the top 200 cities/metropolitan areas in the U.S. There are currently 1,962,296 listings nationwide, and the national median listing price is $214,000, which is an increase of 8.1% over last year.
The highest priced area is Santa Maria – Santa Barbara, CA where the median list price is $863,000. Also high on the list is San Jose-Sunnyvale-Santa Clara, CA, where the median list price is $698,000, a 10.3% increase in one year. Other California cities including San Francisco, Salinas, San Diego, Ventura, and Los Angeles each continue to hold high median listing prices over $500,000 as well.
East coast cities Boston, MA – $386,000, and Washington D.C. – $382,000 posted solid increases in their median listing prices of 5.9% and 5.8%, respectively.
1. There is an interesting article written about Fort Houston in Native magazine this month. Fort Houston’s motto is “Facilitators of Human Potential.” Their website has more information and provides the ability to purchase a membership or classes, including options as diverse as wood-working, photo studio, motorcycle restoration, and using a 3-D printer. I think it is a brilliant concept, and proof of Nashville’s rising creative class.
2. Developer Tony Giarratana announced plans for what will be the tallest building in Nashville and the entire state of Tennessee, called Paramount. The 750 feet tower will be on the corner of 5th Ave N. and Church St. Construction is scheduled to begin in early 2016 on the $225 million dollar project. Current plans for the 884,533 square foot skyscraper include 630 residential units, comprised of apartments, condos, and penthouses. Read more about the development in The Tennessean article.
photo by Solomon Cordwell Buenz
3. An NYC townhouse recently sold for $21 million. The property was purchased by developers in 2012 for $10.45 million. They conducted major work on the 7,100 square foot structure, converting it from ten smaller units into a single-family mansion. The property now features an elevator, wine cellar, and 1,000 sq. ft. garden. I’m wondering how much was budgeted for the renovation?
photo by Douglas Elliman
When calculating returns and “crunching the numbers” for potential investment properties, conventional wisdom suggests that one figures in a loss of income due to vacancy. This figure is typically in the range of 7-10%, but differs depending on the local economy. It is wise to be prepared for unexpected repairs and vacancies, but wouldn’t it be nice to have no vacancies? Wouldn’t it be nice to turn an expected loss of income into profit?
While looking through real estate listings on the MLS, I come across some rather peculiar photos. They reveal some unusual lifestyles and inexplicable design choices that are normally hidden from view. Thankfully, the well-compensated professional real estate agents think that somehow these photos will help their listings sell, so they make them available for the world to see. Therefore, we have the pleasure of enjoying our weekly installment of Nashville’s most Bizarre Real Estate Listing Photos.
Then the little tv said to the big tv, “Someday I’m going to grow up to be just like you.” What the little tv didn’t know, was that it would be a life of sitting on the Goodwill shelf for awhile, then being sent away on a pallet to a dark warehouse, known as the electronics recycling factory. His channels would never be changed again.
The tile guy said he was certified on how to create the look of a dorsal fin. I didn’t believe him at first, but dang, that is a mighty fine looking dorsal fin.
This week, the spotlight turns to 1007 Iverson Avenue, Nashville, TN for our featured House of the Week. This classic brick tudor was built in 1930 and has three bedrooms and three bathrooms. The list price of $199,900 represents a solid value for 1,536 square feet, at $130 per sq. ft. The listing agent, Amanda Bell of At Home Realty, notes the “high ceilings, and unfinished basement for storage or easy expansion.”
1. Can you picture this micro-cabin in your backyard, or favorite hunting spot? It was recently built in Memphis, TN. The design plans are available for purchase, as well as more photos from the Relax shacks website. The designers claim it can be built for a micro-price of only $1200, or even cheaper by using recycled or reclaimed materials.
Last week The Urban Investor featured The Five Most Expensive Homes in Nashville. Because the cheapest property on that list was $10,900,000, it only seems fair to take a look at the low end of the market, where the highest priced home is only $47,000. In this price range, the real estate agent descriptions aren’t as flowery, and there are no high resolution photos. These properties don’t have video tours, and certainly don’t have their own websites. They are the bottom- feeders, The Five Least Expensive Homes in Nashville, TN:
1. 1114 Old Hickory Blvd is listed for $31,900. This two bedroom, one bath house is 860 square feet. Listing agent Jennifer Skinner calls it a, “Cozy cottage in Madison!” I’m not sure if that fact is worth exclaiming, but the “convenient location, near schools, shopping, and highways” is notable. As expected in this price range, the interior appears to need some updates. This is a bank owned property, as the tax records reveal that BMO Harris Bank, N.A. took over ownership two months ago for $47,585. The house, built in 1945, could be a great cash-flowing rental. Any buyer should be prepared to encounter hidden repair costs as well as the obvious. A foreclosure like this has often been vacant for an extended period of time (sometimes years) and is sold in as-is condition. A faulty HVAC system, leaking plumbing, and fungal growth are par for the course. Replacing the worn out floors and addressing the wood paneling would help attract a better tenant and higher monthly rents. Oh, a refrigerator and range would be nice, too.
Nashville had the largest increase in Airbnb bookings of all U.S. cities in the summer of 2014. The increase of 365% since 2013 further proves that Music City has quickly become a huge player in the online booking giant. Airbnb’s website encourages visitors to “rent unique places to stay from local hosts in 190+ countries.” Greater Nashville has responded with over 1000 places for short-term visitors to choose from. Is this a market for real estate investors to get involved in? Is there potential for greater returns through Airbnb than traditional rentals?