We just closed on our second duplex in Chattanooga, Tennessee. We closed on the first one last month. Aren’t they cute?!
How did a couple from Portland, Oregon end up buying a couple duplexes in Chattanooga, Tennessee? We had successfully consolidated all our local holdings into two great properties in Portland but we wanted to add a couple more to our portfolio to increase our future cash flow.
The Portland real estate market has gone completely bonkers in the last couple years. Home values more than doubled in many areas. Great for my equity position but not so great for acquisition costs on new properties. We grew up here and know all of the surrounding areas very well but just couldn’t find anything that even came close to the 1% Rule. So we started looking outside of the metro area, then at neighboring states, then at the states neighboring them… Nothing fit the ROI we were looking for.
Then an article about great cities that are up an coming popped up in my Facebook feed. Chattanooga was on the list with a photo of the downtown and it was just beautiful! The more I read about it, the more it seemed like a stable, growing economy with a relatively low cost of living and great quality of life.
I spent months lurking on Zillow while interviewing realtors, lenders and property managers. Once I felt like I might have a good team put together, we got pre approved and booked a trip!
We stayed at a fantastic Airbnb on the North Shore, walking distance to downtown, grocery stores, restaurants and nature trails. During the day we toured a bunch of pre selected homes and multifamily properties and at night we ate and drank and chatted up the locals. We had a really fantastic time and found two properties that totally fit our criteria!
It may seem crazy to buy so far away from home, but I know from experience that my physical presence is rarely required at my local properties that I manage myself. So with a property manager handling things in Chattanooga, I don’t really need to be there at all.
At this point, we feel that our acquisition phase is complete (for now). Our 10 year plan is to pay off all the rental property mortgages for maximum cash flow. We now have four properties (2 single family homes and two duplexes) on four mortgages plus two HELOCS that we used for the down payments on the Chattanooga Duplexes. In my next post I’ll share our balances and payoff strategy.