1. real estate

the
www.reintn.org
October 2014
$40 ANNUALLY
REIN is a community of local real estate entrepreneurs who gather to learn, share and support one another and the industry.
Getting to the Next Level With Your RE Investing
How to increase your ‘units per year’ and your net worth exponentially
Instead of making $10,000-$20,000 once or twice a year selling or flipping a house, how would you like to make $2,000-$3,000
passive income every month for the rest of your life? (Did you catch that –the rest of your Life – not the rest of this week, month,
or year – money coming in till you’re dead.) How about $5,000-$7,000 per month? How about $40,000-$50,000 per month,
EVERY MONTH, for the rest of your life? How about having these investments continue to pay your family – after you are gone
from this earthly life?
If you said “Yes” to any of these questions you must meet Anthony Chara at the next REIN General Meeting on October 13, and
also at REIN’s 1-Day Apartment Investing Workshop October 25.
Anthony is founder of $uccess Classes and President of Apartment Mentors LLC.
Anthony’s specialty as an international speaker and educator is teaching regular
people how to successfully invest in Apartment Buildings. He’ll show you:
•
•
•
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Why apartments and multi-units make sense in today’s market
Advantages & disadvantages of Apartments
How to know the numbers inside and out
How apartments allow you to control your own destiny when it comes to
appreciation and wealth-building unlike single family homes
Why some people find it easier to buy an apartment complex than a
single family home
Come learn how to get in on some terrific cash flow. Two of Anthony’s recent
students purchased a 150-unit complex in Louisiana with about $2,000 out of
pocket. Two grand! Would you like to know how they did it? Then register now to
come to Anthony’s 90-minute 101 class on October 13, and his 202-level, all-day
workshop on October 25th.
Anthony Chara
REIN General Meeting
Monday October 13, 2014 5:30 to 9:00 pm
Main Presentation at 7:00 pm
FiftyForward Center
174 Rains Avenue
Nashville, TN 37203
FREE for REIN members; $25 for Meetup members & guests
Reserve your dinner by October 9 - only $8!
www.reintn.org/dinner
Trey Cain 615-778-9590
Phillip Poynor 615-550-5565
First Advantage Bank
Yogi Dougher
615-400-0526
Ace Exterminating
Will Hadden
615-876-7185
First Call Claims
Ryan Willis
865-719-2569
Nashville Title Insurance Corp
Andy Maloney
615-385-5944
Berto Home Improvements
Norberto Flores
615-578-9014 HICKS HVAC and Weatherization
Jeremy Hicks
615-625-2135
Natchez Trace Insurance
Jene-Marie Marks
615-353-1992
Bob Parks Auction
Adam Hensley
931-224-0308
Integrity First Realty Group Josh Stewart 615-681-5267
Perry Law Firm
Steve Perry
615-431-9649
Belle Meade Title & Escrow
Robert Notestine
615-297-1568
IRA Innovations
Mike Todd
615-794-8961
Primary Residential Mortgage
Shaun Lyons
615-590-1557
Chandler Reports
Wendy Greenlaw
877-711-0200
iServe Residential Lending
Kent Secker
615-663-1259
Renew Real Estate Services
Bob Potter
615-800-8490
Clinard Home Improvement
Keary Gilbert
615-399-3066
Mac McRae Mr. Goodroof 615-824-8100
Residential Investment Advisors
David Childers
615-479-8737
Courthouse Retrieval System
Kirsten Elkins
615-202-3946
McLemore Auction Co.
Stephen Aleman
615-517-7675
Stone, Rudolph Henry, PLC
Henry Martin
615-376-8101
Cumberland River Group
Mark Miller
615-319-7864
Mi Casa Solutions, LLC
Flor Melgar
615-582-1300
Tandem Realty
Mark Hill
615-329-9988
DirectBuy of Middle Tennessee
Rick Murphy
615-373-4575
Movement Mortgage
Ron Greenfield
615-671-9156
TyJax Builders, Inc.
Larry Derossett
815-674-8050
Become a sponsor or place an ad. Call Rachel Sullivan 615-885-5454 management@reintn.org
NEWSLETTER
BOARD OF DIRECTORS
Mary Wester
Robert Mohon
Sandra Lush
Rachel Sullivan
Debi Matthews
Joseph Branton
William Sugg
Mary Wester - President
Andy Flanigan - Vice President
Larry Jones - Treasurer
Robert Mohon - Past President,
Programs Chair
Carol Plemons - Past President
Submit comments and articles to editor@reintn.org. 2
Bev DeLong - Membership Chair
Debi Mathews - Library Chair
Sandra Lush - Education Chair
Scott Nicodemus - Vendor Chair
Justin Cutler
Jeff Ley
CALENDAR OF EVENTS
October 13, 2014
October
6
7
9
13
16
20
21
25
Rutherford County Subgroup
REIN Lunch Network – Dalt’s
Wholesaling Subgroup
REIN General Meeting @ FiftyForward Center
Williamson County Lunch – TBA
Landlording Subgroup
REIN Lunch Network – Dalt’s
Saturday Workshop – How to Grow Your Wealth with
Apartment Buildings & Multi Units / Anthony Chara
November
3
4
10
13
17
18
18
20
Rutherford County Subgroup – canceled
REIN Lunch Network – Dalt’s
REIN General Meeting @ FiftyForward Center
Wholesaling Subgroup
Landlording Subgroup
REIN Lunch Network – Dalt’s
Fundamentals of Real Estate Insurance / Kevin Hale
Williamson County Lunch – TBA
2015 BOARD OF DIRECTORS
Per REIN’s Bylaws, below are the new 2015 Board Members
proposed by REIN’s Nominating Committee.
A voice vote of those attending November’s General Meeting
will confirm this slate.
Dinner
5:00 pm – 6:30 pm
Register by Thursday, 10/9/14
www.REINtn.org/dinner $8
bREakout $essions
5:30 pm – 7:00 pm Networking
Bring business cards and your badges! Look for stars
on their badges and match your star with theirs. Learn to
connect with others on a personal level one on one or in a
quick format. Make the most of your time to meet people;
grow your investing by setting up lunches or going out for
late supper or coffee after the meeting. Ask what you can do
for them to help them be successful.
5:30 pm – 6:15 pm Real Estate Financing 101 /
Yogi Dougher, First Advantage Bank
Yogi has been a frequent speaker at REIN for many years on
how to finance everything from your first duplex to a large
commercial project. He will go back over the basics of real
estate math. How to make yourself more bankable. Rules
of thumb to help gauge what you are buying, how much to
offer, when to walk away.
You don’t want a problem property, neither does the bank.
Learning how to view real estate through the eyes of the
bank will increase the odds of getting financed, getting
better rate and terms and avoiding a costly head ache. Bring
your questions, this is always an informative session.
Andy Buford
Renewing for a second two-year term:
5:30 pm – 6:15 pm
Genius Bar –
Evictions /
Gene Wilkerson, retired Sheriff’s Deputy
Gene has served detainer warrants for evictions and as a
private process server for over 20 years. Ask one on one
questions or share as a small group in Q&A format.
Sandra Lush
Debi Matthews
Other directors continuing their existing terms:
Justin Cutler
Bev DeLong
Andy Flanigan
Larry Jones
Jeff Ley
Robert Mohon
Carol Plemons
Mary Wester
Scott Nicodemus—Alternate
5:30—5:10 and 6:15 pm – 6:40 pm Investing in Single
Family Homes—Guests & New Members
This continuing series is for the new investor who wants
to profit with single family houses. Learn the 3 steps you’ll
take to bring home a check for your profits: locking up the
deal with a contract (you’ll get a sample contract), marketing
the deal (you’ll get a template), and what happens at closing
(complete with sample closing documents).
MAIN PRESENTATION
Thank you, Rachel
7:00 pm – 8:45 pm Apartments / Anthony Chara
for your hard work making
REIN great!
REIN LATE NIGHT
Spend a few minutes networking during the breaks or in the
lobby and make plans for late supper or coffee in Belmont
/ Hillsboro or 12 South hot neighborhoods. Many of the
members head out to M.L Rose on 8th Avenue after the
meeting. See you there!
5 year anniversary
Rachel Sullivan
3
R E A L E S TAT E , T I T L E I N S U R A N C E , B A N K RU P T C Y L AW Y E R S
EAST NASHVILLE
COOL SPRINGS
1100 Douglas Avenue
Nashville, TN 37206
7105 Crossroads Blvd., Suite 101
Brentwood, TN 37027
FAX
OFFICE
615-807-3456
615-778-9590
www.cainpllc.com
|
www.tennesseetitlellc.com
4
FALL REIN HOMES TOUR
As real estate investors in Nashville, REIN members had a unique
opportunity to visit properties that were currently under-going
the residential redevelopment process. This year, on Saturday,
September 6th, a group of about 30 people gathered at the REIN
Center at a little before 9 am to head out on the 2014 Fall Homes
Tour. It was a beautiful sunny day that Saturday and everyone
was buzzing with excitement as tour details were handed out
and carpools were being coordinated. Nothing beats getting
a first hand look at current projects underway, so here’s what
happened that day for those of you
who missed it!
St., Nashville, 37207, we were greeted by host Scott Jones, who
had to use a power drill to uncover the board that was covering
the front doorway of the house. The 3 bedroom, 1 bath wood
siding house, built in 1922 with 918 square feet, was completely
gutted down to just the frame.
This property was found on the MLS as a short sale and took
about 10 months to purchase. As we walked through the house,
Scott shared with us that the plan for the property is to add onto
the existing home to increase the house size to a total of 2000
sq ft and to build a two-car garage on the ground level under
the main floor house addition that can be accessed from the
back alley. It was definitely interesting to see an older house
taken down to the studs and getting a peek at how knob and
tube electrical was done back in the
day with ceramic casings through
the wood because they were afraid
of wires touching the beams. This
property will have building, electrical,
plumbing and HVAC permits pulled.
The first stop on the tour was the
almost finished property at 520
N. 2nd St. Nashville, 37207. Our
host, Dale Hire, shared
with everyone about the
challenges of the project as
well as the benefits of being
in a hot neighborhood. This
3 bedroom, 2 bath brick
home was built in 1969 and
has 1172 square feet. It was
purchased from an owner
in foreclosure and needed a
complete make-over.
The Numbers
Purchased$90,000
Retail Sale $350,000
Rehab time frame
3 months
Profit $65,000
Lessons Learned
™™ Don’t underestimate the time and money it can take to
completely clean out the house!
The fix-up included an open floor
plan, new cabinets and granite
countertops, stainless steel kitchen
appliances and modern bathrooms.
There was also a skylight added
to the kitchen area which allowed
much natural light to flow in. The
challenge came when the refrigerator
water line broke and water soaked through the newly installed
hardwood floor. Replacing all
damaged hardwood flooring
cost an additional $5000+.
Luckily the property has
appreciated in value while
Dale has owned it, softening
the blow of such a surprise,
and allowing the addition of
several upgrades due to the
higher resale value.
I Buy and Sell Vacant
(Or Soon To Be Vacant)
In-fill Residential
Building Lots
Contact Ed Meek
615-506-9321
EdHasProperties@hotmail.com
The Numbers
Purchased $68,600
Retail Sale $239,900
Rehab time frame
3 months
Profit $90,000
Yogi Dougher
Senior Vice President
Business Banking Market Manager
Lessons Learned
™™ Use the best refrigerator water line!
™™ Get insurance to help cover unwanted surprises.
First Advantage Bank
Tips and Resources
™™ Installed kitchen cabinets that opened from the
front and side to allow easy access to items inside
MC Granite Countertops—quartzite kitchen counters
615-400-0526
Yogi.Dougher@fabk.com
The second property we visited was in a completely different
stage of the rehab process. When we arrived at 1223 Stockell
5
TOUR — continued
sq ft was a former rental of Mary’s, which has been spruced up
and is being marketed for a retail buyer. It was acquired after
Mary financed the project for another investor. Mary has gone
through the process to create a horizontal property regime,
allowing it to be marketed with a building pad on the property.
The updates include a new roof, new HVAC, upgraded kitchen
and bathroom and new paint on the inside
The Numbers
Purchased $84,000
Improvements$24,000
Retail Sale $205,000 for house
$65,000 for building pad
Lessons Learned
™™ Be careful partnering—some joint venture or partner
investors may not be able to pay their share of expenses
when time comes.
Tips and Resources
™™ Think creatively and have multiple exit strategies.
Always hire a structural engineer to provide advice and a
structural engineering letter.
The last property on the Homes Tour was further north at 3644
Chesapeake Dr, Nashville, 37207. Here, owner Scott Plemons
of EXIT Realty shared with us the details of this 3 bedroom, 2
bath, brick house with 1026 sq ft. On the interior, this renovation
project focused more on the flooring and kitchen. Tile was added
in the kitchen and bathrooms and hardwood floors were put
throughout the family room, hallway and 3 bedrooms. Also in
the kitchen, new granite counters were installed and the existing
kitchen cabinets were re-painted with all hardware replaced.
The house received new windows throughout and the hearth
was replaced with tile. On the exterior, a new roof was put on,
as well as a new railing on the front porch with wrapped fascia.
To finish up the project, trees and brush from the back yard were
removed to give everything a clean look.
The next property on the tour was also Scott Jones’ project.
This house at 1334 Meridian St, Nashville 37207 was also
completely gutted to the studs. As we walked through this 1600
sq ft, 3 bedroom, 2 bath house originally built in 1910, Scott
shared with us the story of how the house went through multiple
extensions as previous owners had added on to the back of the
original house.
This property was also found on the MLS as a short sale and
the primary exit strategy is to list for retail when everything is
complete. Renovations include a new floor plan, moving the
back door to become a side door, building a master bedroom
on the first floor with an ensuite bath and walk-in closets and
adding a nice big front window to bring better lighting into the
house. There will also be a 2nd story that gets finished as part
of the rehab. It will be very exciting to see this completed project
and compare it to what we saw during the Homes Tour!
The Numbers
Purchased Rehab Cost Retail Sale Profit The Numbers
Purchased $91,000
Retail Sale $289,900
Rehab time frame
11 weeks
Profit $47,000
$48,000
$25,000
$105,900
$22,900
The Homes Tour was a great
way to learn more about hot
neighborhoods in the Nashville
market and to gain more insights
from local investors who are
currently working on projects.
We asked a lot of questions and
picked up a few new lessons
and tips along the way.
Lessons Learned:
™™ Complete a full termite inspection prior to closing to
negotiate a better price with the bank based on the
extensive water and termite damage.
™™ Bring a contractor to inspect the property, especially
old houses.
Tips and Resources:
™™ Ace Exterminating Co., Inc. for termite issues. Ace
offers $25 termite letter for sellers or buyers!
™™ Used www.floorplanner.com to draw plan to scale for
new layout of house
Another added benefit of attending the tour was all the networking
that occurred as we walked through these properties with other
investors who are also looking to redevelop houses. Business
cards were exchanged and contractor contacts were shared to
help those who were looking for more options.
The fourth property on the Homes Tour was a completed
renovation that is already on the market. On our visit to 1609
Cahal Ave, Nashville, 37206, our very own REIN President, Mary
Wester, shared with us the unique story behind this property.
This 3 bedroom, 1 bath house originally built in 1945 with 1248
The tour ended back at the REIN Center where Parthenon Title
sponsored Dalt’s lunch for all who attended.
6
Thanks to Peggy Wu for writing the article, Andy Flanigan and
Larry Jones for coordinating the tour.
PROBATE INVESTING By Vena Jones Cox
One of the questions I get over and over is, “How do I find/
negotiate/buy properties from people who’ve inherited them?”
demand. Trusts, though, are fairly rare, and you’ll usually end
up with one of the other two options.
It’s a good question, because lots of people who’ve inherited
a property want to sell it. What’s more, the properties
themselves tend to be outdated if not downright distressed,
and paid off or close to it. And although a fair number of
investors “work” this kind of deal, there’s less competition for
probate properties than for some other types, like foreclosures
and listed properties.
If the property is NOT titled through a JTWROS and was NOT
in a trust, it will, with few exceptions, have to go through
some form of the probate process before it can be sold to
you. The complexity, time frame, and cost of the process
depend in part on the size of the estate (some states have
a fast tracking process for small estates with no debts) and
whether the owner died with or without a will.
So yes, probate is something to look into, especially if you’re
looking for somewhat distressed properties. But probate
marketing isn’t a “magic bullet”; like any list of potentially
motivated sellers, you’ll find that many aren’t motivated to
sell at all, and many others aren’t motivated to sell at YOUR
price. It’s tough to get seller financing from probate sellers,
as there are often a number of heirs who’d have to agree to
take payments; dealing with people who are grieving the loss
of a loved one can be a challenge; and don’t even get me
started on the many, many nasty situations you’ll run across
where the family members are fighting over the money and
aren’t even speaking any more.
If the owner died with a will, the will appoints a person who
is in charge of getting the estate settled and the assets
into the hands of the heirs named in the will. This person
is called, in various places, an executor (or executrix), a
personal representative, an estate representative, etc. This
person is usually a close friend or relative of the decedent,
and is usually NOT the same as the attorney who is handling
the estate for the court.
The will also gives instructions about what is to happen to
the property in question: it may instruct the executor to sell it
and split the proceeds amongst the heirs, or it many instruct
him to deed the property directly to the heirs.
But the most specialized thing about dealing with probate
properties is that, because probate is a legal process, getting
to the right person and getting to the closing can be confusing
if you don’t understand the mysterious stuff that’s happening
in the background. And unfortunately, the seller is often more
confused than you are: I’ve had a number of heirs over the
years who tried to sell me a property they didn’t even own,
because they didn’t understand that just because Grandma
WANTED them to have the house didn’t mean that when she
died they AUTOMATICALLY owned the house. So let’s start
by talking about the various ways in which a property gets
from the deceased person to the heirs.
And there’s a BIG difference. If the property is deeded to the
heirs, they can then choose to keep it, rent it, or sell it for
any amount they see fit. You’ll make your offer directly to the
heirs, and they will make a decision as to whether or not to
accept it.
However, if it’s to be sold FROM the estate and the proceeds
divided, there’s almost always a process by which the court
orders an “appraisal” (usually a drive-by by a real estate agent,
who gets paid less than $50 for this service), and then gives
the executor permission to sell it only within some percentage
of that appraisal which, frankly, is often a whole lot higher
than actual retail value. The percentage of appraised value
at which the executor can sell varies, but it’s rarely less than
80% of appraisal—which, since you’re usually looking to pay
more like 60%-70%, is obviously problematic.
There are a number of ways in which a property might transfer
from a deceased owner to his heirs. When you talk to a seller
who says that he “inherited” the property, it’s important to
know which method was used or will be used. Please note
that the terminology and processes may vary slightly from
state to state.
Luckily, there’s usually a court process—one which the
executor may or may not be aware of—by which the executor
can petition the court to sell the property for less based on
the fact that he hasn’t had any higher offers. Once you’ve
determined that the executor (who has the sole right to accept
and sign an offer when the property is being sold from the
estate rather than being distributed to the heirs) is willing
to look at a price lower than the appraisal, you simply write
your offer and let him go back to court to ask permission to
accept it.
The first, and simplest, is when the decedent (that’s the dead
person) and the heir or heirs already co-owned the property
prior to the death. If the title was held as a “joint tenancy
with right of survivorship” (JTWROS), the living owners do,
in fact, get full ownership of the property as soon as they file
the death certificate of the owner who passed away.
Unfortunately, many heirs believe that they have a JTWROS
when, in fact, they don’t. I’ve dealt with many widows and
widowers who’ve been absolutely convinced that they owned,
and could therefore sell, a property that was, in fact, coowned with their dead spouse’s un-probated estate.
If the owner died intestate—that is, without a will—
another process takes over. The probate court appoints an
administrator (often a near living relative, but sometimes an
attorney) to determine who the heirs are and to function as
the executor for the purpose of selling the estate. This can be
a long and complicated process, as there may be no obvious
heirs, or there may be many. In these cases, any real estate is
almost always sold from the estate, rather than being passed
The second simplest means of transferring a property upon the
death of the owner is via some form of trust. In this case, the
trustee can generally dispose of the property immediately, in
whatever way the trust calls for, or the successor beneficiaries
7
PROBATE — continued
OFFER WITH CONFIDENCE
to the heirs. If you find an estate in this situation, your offer
will be made to the administrator.
What is a contingency? A contingency is often attached
to offers as an ‘out’ in case things go sideways during the
due diligence process. Let’s take an example. You visit 375
Cherrywood Lane and see a really ugly house that has amazing
potential. Your plan involves knocking out a living room wall to
triple the size of the kitchen and make a real masterpiece. In
fact, the whole house can be rehabbed for only $35,000 – but
there is a major crack in the back that goes through 5 bricks.
Cracks that stay in the mortar – step cracks – are OK, but when
bricks are ripped in half that is not good. Horizontal cracks
are bad. The $80,000 offer meets Maximum Allowed Offer
(MAO) but calling your structural engineer returns an estimated
$40,000 in repairs which kills the deal dead. After a call to your
realtor to exercise the contingency you move on to other deals.
The real messes in probate happen when intestate owners
die, then time passes, then the heirs decide to sell without
understanding that the estate has to be probated first.
A FastTrack student of mine recently dealt with this issue to
an extreme I’ve never seen before: she found a motivate seller
whose grandfather had died in the 1930s, and the house had
simply passed informally from family member to family member
up until today. At no point was it ever deeded our of grandpa’s
name. His numerous children and grandchildren didn’t even
know that they owned a share of this property; everyone just
assumed that whoever was living in the property at the time
was the “owner”—and for years, they’d just let the “owner”
decide who to “give it to” when they didn’t want it anymore.
I have absolutely no fear in offering in houses with structural
unknowns. Why? Contingencies! I’m not a structural engineer
and I do not know anything about footer dropping, rebar size,
hydraulic pressure or anything like that (I barely passed physics
in college). But I can use my phone and call an engineer and
for $300 he will generate a full report on the property and
recommend a company to come give me a quote on repairs.
If a repair comes back at $3,200 – great. If it comes back at
$32,000 – I’m out of the deal. Move on.
The problem is, that without a will, the law assumes certain
things about who gets what: specifically, that the surviving
spouse inherits 50% of the estate and that the children split the
remaining 50%. So in order to actually purchase this property,
the family would have to get an estate opened, appoint
administrator had to track down any surviving children and
the spouses and grandchildren, where the children themselves
had passed away. All of the people who, 80 years later, were
lineal descendants of this guy or widows or widowers or his
children would then need to sign quit-claim deeds releasing
their interests. This process could take years and costs tens
of thousands of dollars—not worth it for a house worth around
$15,000.
Contingencies are your way out of an offer. “This $78,000
offer is contingent upon structural inspection” or partner’s
approval (classic: your cat is the partner) or financing or
plumbing inspection or roofer approval or whatever. You do
not need more than one. An offer with 34 contingencies does
not look like an eager buyer – it looks like someone looking
for an out. And you do not need to hire or prove any sort of
structural inspection happened. After an offer is accepted
with a contingency there is typically a 5-10 day window for
you to make all necessary preparations and inspections
before money is exchanged. Get inspectors, contractors and
everyone under the sun to walk through the house. If everyone
gives you a thumbs up – proceed and buy the house. If you
get 3 thumbs ups and 2 thumbs down - just call your realtor
and say, ‘we need to exercise the contingency.’ There is no fee
or other outcome. You’re done. Period. Move on and offer on
other houses.
There’s a final way in which estates may be handled by the
court, as well. If the debts of the estate exceed the assets, the
court may order any real estate to be auctioned in order to get
a “highest and best price” to satisfy as many of the creditors
as possible before closing the estate. In these cases, you’ll
have to attend the auction like everyone else. Fortunately, if it’s
a true court-ordered auction (as opposed to a private auction
by the heirs), it’s usually an absolute auction, with no reserve
price.
So in summary, here’s how you make offers on estate
properties:
1. If the property has been deeded to the heirs, either through
a JTWROS or through probate court, you negotiate with
and write an offer to the heirs
2. If the property is to be sold by the executor or administrator
and the proceeds divided amongst the heirs, you negotiate
with and make the offer to the executor or administrator,
who may confer with the heirs, but has the ultimate right
to sell the property within the bounds set by the court.
3. If the property is sold by court-ordered auction, you attend
the auction and bid like any other bidder.
Contingencies are in virtually all types of real estate
transactions – infill development (contingent on zoning
approval), building on raw land (contingent on financing),
updating an old house (contingent on Historic District approval)
and more. An offer with contingencies is not as strong as an
offer with none. Typically the formal process of buying via the
MLS/realtors/banks/etc., involves more contingencies than
buying directly from a homeowner. If I’m buying from Mr. Earls
down the road I can likely negotiate to make all inspections
before I bother offering. And if we are using my contract I can
spell out 10 or 15 or 30 day inspection period. Or I can put in a
liquidated damages clause – which is a good idea – that says if
I fail to close the only thing at risk is my $100 deposit.
If you’re asking the question, “How do I figure out in advance
which it is?” the answer is a little more complex: you’ll either
have to research the estate at the courthouse or, better yet,
ASK the seller which situation he’s in.
There are many emotions and fears associated with
offering on houses, but the intelligent and educated investor
knows that he can offer with confidence knowing that there is
always an ‘out’ should things go array.
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By Philip Rykwalder nashvillephilipr@gmail.com 615.636.9026
VACATION HOMES, VRBO, AIRBnB LEGISLATION PROPOSED
™™
™™
™™
™™
Have you thought about renting out your home to all those
visitors to Music City? Maybe you thought it would be a good
real estate investment. Short term rentals are a niche business
for many Nashvillians. Some own more than one home and
some rent rooms in their trendy locations to support their
mortgages and to make a living after falling off the corporate
ladder. Others just see it as a way to meet people from across
the world and show them Nashville hospitality. They turn around
and travel worldwide using the same reservation systems such
as AirBnB.
Further discussion
™™ Other cities allow 4-8 BRs, limit # per block or square
mile
™™ Some units may be in a multi-tenant building
™™ Time limits to match IRS code for vacation homes —14
days annually before permit is required
™™ No multiple tenants of one housing unit, i.e. room rental
Legislation is coming and that upsets these investor / small
business people about more restrictions and taxes. Neighbors
are concerned about the parking and the party houses rented
to wild, drunk and noisy vacationers. People with bed and
breakfasts are dealing with onerous rules that limit them to 3
bedrooms and 1 parking space. Some B&B owners feel they are
subjected to rules and that this other hospitality segment is not
on the same playing field. Should there also be the maximum
limit on bedrooms for vacation home / VRBO rentals? Is sharing
your house for a fee a hospitality business subject to hotel,
motel, occupancy and sales taxes?
Community meeting
Wednesday, October 15 at 5:30
Mid-Town Hills Police Precinct
1443 12th Avenue South (near Wedgewood)
Send comments to burkley.allen@nashville.gov
LEGISLATION PASSED
HPR / DUPLEX LOTS
Burkley Allen, Metro Council 18th District says, “Thanks to all
the folks who attended the public meeting last night [Monday
9/22/14]. Thanks for your interest in this proposed legislation.
I am working my way through the comments from the meeting
and will incorporate appropriate changes into the next draft.
I appreciate the good dialogue we had at the meeting, and I
look forward to more constructive input as the conversation
continues.
Ordinance #BL2014-770 to control 2 houses on one ‘duplex’
lot has some unintended or possibly intended consequences.
After the planning department and Councilman Hunt heard
from the neighborhood groups and investors Mr. Hunt moved
on third reading the original bill and did not include any
amendments regarding garages and access.
Setback
Buildings must be 6 feet apart instead of current requirement
of 10 feet or they must now be 80% attached. This eliminates
the ‘umbilical cord’ design.
As I said at the meeting, it will be very hard to make everyone
happy, but I want everyone to feel that their voice has
been heard. I believe it is fair to bring the short term rental
phenomenon into Nashville’s official hospitality mix, and I think
that we all benefit from the good publicity about Nashville that
the revenue will help generate.
Height of Building
Detached dwellings cannot exceed a ratio of 1.0 horizontal to
1.5 vertical measured at the most exterior corners of the front
façade. Measurements will be based on natural grade.
I also think it is important to balance the needs of residential
areas where long term residents cherish their quality of life
with this innovative use of homes for visitors. That will mean
giving some in both directions. I hope people will enter into the
discussion with the big picture in mind and will offer suggestions
from a global viewpoint.”
Some
™™
™™
™™
™™
™™
™™
™™
™™
™™
™™
™™
™™
™™
™™
Noise regulation rules must be followed
Owner or responsible person must live <25 miles
Notification of neighbor if shared wall or drive
Insurance required—$1 million
Councilman Hunt said that when all the parties can agree [on a
better height and measurement from grade or top of foundation
as well as garage and access restrictions] he will introduce an
amendment to Metro Council.
Codes has implemented the restrictions in the Metro Council
bills passed in 2014.
of the restrictions in the current draft
Short term rental is 2-30 days
31 days or more is covered by Landlord Tenant Act.
Limits on the number of rooms—3 BR
Limits on the number of people—2 adults per BR
Minimum age—21 years
Parking limits—1 space
No signs
No RVs, campers, buses, tents, trailers seen from street
No food prepared or served per health regulations
Allowed in all areas allowing residential uses
Maximum of one unit per individual owner
Requires annual $50 fee and permit issued from Codes
Permit not transferrable to another individual
Taxes—Sales & Hotel / Motel are currently required
Front Setbacks
No affidavit allowed. Codes requires a stamped plan showing
the setback of the proposed house and the 4 closest houses.
Detached HPR Duplexes
For the height Codes need either a stamped plans concerning
the elevation, or a notarized affidavit stating you will not exceed
the height requirement. In the affidavit you will need to state
the height of the house at the front façade from grade to the
very top. 9
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Supporting REIN as a corporate sponsor for over 6 yrs.
750 Old Hickory Blvd; Building Two Suite 150; Brentwood TN37027
750 Old Hickory Blvd; Building Two Suite 150; Brentwood TN 37027
WHY SPEAKERS SELL PRODUCTS AND SERVICES AT REIN
REIN’s primary mission is educating individual investors who
want to invest in our region. Each and every month, members
and guests get to hear 11 main speakers and 24 speakers at
our Breakout Sessions. You can bet that’s quite a challenge to
pull off month after month.
In fact, this special revenue sharing arrangement allows your
REIN member dues to remain well below the $500 per year per
member that it costs to run REIN. Considering that, $149 for
one member and $185 for two members seems fairly cheap.
So, keep coming to meetings. Take lots of notes. Show
speakers respect. Admire their tremendous time and effort to
bring you good education and thank them. Consider buying
what they have for sale.
Your REIN leaders watch trends, study the market, and listen
to your input to create unique training. We carefully select each
presenter at your classes, breakouts, workshops and general
meetings to be sure you get the best info, relevant to today
from leading and ethical sources.
Remember, education is an investment of your time and money.
The one mistake you avoid by having good education can save
you tens of thousands of dollars—far more than you invested
to get that education. At REIN we highly value your education.
Plus the speakers come to REIN at their own expense to train
us—FREE. They do not charge us a penny. In order for us to get
this high quality, top-notch training, we allow some speakers
to offer our members and guests the opportunity to purchase
products and services. The good news is when you buy from a
REIN AD the speaker donates a very large
Monday,
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2013
15:20
speaker,
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R.E.S.P.E.C.T
Stay for the entire presentation. Sit in the last row in the
back if you must leave early. Leaving early makes people
wonder about the value of a speaker’s product or credibility of
what he says. That should not be the impression you are giving
by leaving early. What if that were you speaking?
What does this accomplish? We can re-invest right back into
the organization that you are part of and it helps to ensure the
continuity of REIN. Also this keeps your annual dues low and
affordable.
Disclaimer
The Nashville Investor is published monthly by Real Estate Investors of Nashville (REIN), a not for profit association, helping its members learn, grow, and prosper as real estate investors.
REIN does not endorse any person or organization or the advertisers appearing in this newsletter. Its programs are designed to be educational, motivational, and enjoyable. Speakers
primarily discuss techniques and methods that work for them. Whenever actions involving purchases, sales, or tenant relations are being considered, rely upon the advice of your real
estate professionals---your lawyer, accountant, and realtor. Always seek competent legal advice concerning your specific situation.
10
REIN
REIN PHOTO CONTEST
CLASSES
Register
onlinebusiness
www.reintn.org/calendar
Tell us about your
real estate
with your pictures!
Discounts for early registration
We are looking for interesting, colorful high-resolution pictures
that epitomize allREIN
aspects
of real
estate Trust
investing.
We want to see
Center,
Truxton
Building
shocking before
and
after
photos
of
that
bathrooms,
kitchens,
4525 Harding Pike #200, Nashville, TN 37205
finished retail-ready homes, apartment buildings, storage facilities,
etc. Get creative and show us what your real estate investing looks
Apartment Investing Workshop / Anthony Chara
like - both the good and the bad.
Saturday October 25 9:00 am – 5:00 pm
Registrationthe
Members
$49
WeEarly
are redecorating
REIN Education
Center, and the finalists
Meetup
Members
$97on the walls. The winner will
photos
will be
printedand
andGuests
displayed
be determined by the REIN Board and will receive bragging rights
how free
and membership
why people like
Robert Kyosaki
Donald Trump
andLearn
one year
extension
to REIN!and
Email
used
apartment
to
generate
massive
cash
flow.
submissions to Andy Flanigan: aflanigan@musiccityrehabs.com by
March 31, 2014.
Anthony Chara is founder of $uccess Classes and President of
Apartment
Mentors
LLC.
Anthony’s
as anbyinternational
By entering
the contest,
entrants
grant
REIN, and specialty
those authorized
REIN, a
royalty-free,
perpetual, non-exclusive
license
to display,
distribute,
speakerworldwide,
and educator
is teaching
regular
people
how to
reproduce and create derivative works of the entries, in whole or in part, in any
successfully
in Apartment
He’ll
show you
media
now existing orinvest
subsequently
developed, forBuildings.
any educational,
promotional,
publicity,
archival, scholarly and
all other
REIN
why exhibition,
apartments/multi-units
make
sense
inpurposes.
today’s Any
market, how
photograph reproduced will include a photographer credit as feasible. REIN will not
to know
theany
numbers
inside
and out,
andany
how
apartments
be required
to pay
additional
consideration
or seek
additional
approvalallow
in
connection with such uses.
you to control your own destiny when it comes to appreciation
and building your wealth unlike single family homes!!
You’re invited to the
REIN LUNCH
NETWORK
Wouldn’t you like to know why some people find it easier to
buy an Apartment Complex than a single family home? Come
learn how they did it and get in on some terrific cash flow. 2 of
Anthony Chara’s recent students purchased a 150 unit complex
in Louisiana with about $2000 out of pocket. Would you like to
know how they did it? Then come to Anthony’s 1-Day workshop!
What you’ll learn at the Apartment Workshop:
™™ Advantages1st
& Disadvantages
of Apartments
WHEN:
& 3rd Tuesday
11:15 - 1:00
™™ Differences Investing in Apartments vs. Single Family
Homes
WHERE:
Dalt’s Grill “Sun” Meeting Room
™™ ‘Lingo’ You Need to Know
38
White
BridgeApartments
Road
™™ Key Ratios Used
in Analyzing
TNReal
37205
™™ Analyze theNashville,
‘Numbers’ on
Complexes
™™ Bring your own deals to be analyzed ‘live’!!
WHO:
ACTIVE real estate investors
WHY:
Share
deals
to sale
or purchase.
Register
by end
of day Discuss
trends
and hot topics
October
22nd for the
Workshop
in real
estate
**Early Bird Bonus
on October 25th and receive Discount Pricing.**
RSVP www.REINTN.org to register FREE Questions?
LunchWest@REINTN.org
Insights
$97 per person
Prevent water damage by putting pans under water heaters and washbeforethem
REIN
Member
Discount
ers when replacing or installing
on any
floor, including
the main,
and draining them to the crawl space or outside. Codes now require
(Includes
50+
page
Workbook/Study
Guide)
this on upper floors for washers, but washers and water heaters can
still cause damages on any floor.
BRING BUSINESS CARDS & COPIES
OF DEALS
You’ll learn more in this
Also, lengthen the flapper chain in the toilet tank so that the handle
must be held for the
toilet to
flush. This will
prevent
with
low- in
1-Day
workshop
than
mostoverflow
people
learn
flow toilets. However, you must explain to the user the rationale.
others’ 3-day boot camps
Register now. Space is limited.
7
11
4525 Harding Road, Suite 200
Nashville, TN 37205
www.reintn.org
HomeDepot
Depot
2%
Home
2%
rebate
Have you received your rebate?
Have your received your $$?
Sign up www.reintn.org/homedepot
visit www.reintn.org/homedepot
Scan this
code to visit
our website!
You’re Invited to Lunch
VOLUNTEER!
Bring business cards, deals & flyers
We need people to help!
Williamson County Lunch
3rd Thursday of the month
Carrabba’s Restaurant
553 Cool Springs Blvd., Franklin, TN 37067
Cost - Lunch
™™
™™
™™
™™
™™
Qualifications
™™ Trustworthy, dependable, positive attitude
Sponsor: The Terry DeSelms Team
REIN Lunch Network
1st and 3rd Tuesdays of the month
Dalt’s – Lion’s Head Shopping Center
38 White Bridge Rd. Nashville, TN 37205
Cost - Lunch
Sponsor: Tennessee Title & Escrow Affiliates
Register www.reintn.org/calendar
Registration at the monthly meeting
Greeters at monthly meeting
Newsletter and website content contributors
Newsletter editor
Corporate sponsor committee members
™™
™™
™™
™™
Compensation
Meet other investors and build relationships
Possible deals may result
Help others build their businesses
Learn real estate investing with a new REIN friend
Karma comes back to you!
PRICELESS!
Let us know your talents
Sign up with Andy Buford, Volunteer Coordinator
volunteer@reintn.org
www.reintn.org/volunteer