BiggerPockets

Investing Wisely out of State

Monday, January 17

Today’s real estate market in Memphis, TN presents an outstanding opportunity to acquire investment properties in good areas, at a low price point with high rents.   While we had a great year in acquiring properties for ourselves and selling turnkey investment properties to investors nationwide; it should not be as difficult as it is sometimes.  One of the challenges we face is selling a legitimate product and service, while opportunistic individuals run businesses selling worthless Memphis real estate to out of state investors who get “took” by a sales pitch of false facts and bad data.  These types of businesses/individuals are usually out of state and do not care what happens after the sell.

Today I took the first of a few phone calls I will receive from out of state investors who push their “fantastic deals” to me.  As always, I listened to the sales pitch, because you never know if today is the day that I actually hear a “cold call” for a property worth buying.   After the call, I took a look at the properties this investors sent me in a email and to no surprise……………………CRAP!  I replied to him in my email that I would need a tank to collect rents in these areas and even at that, I would still not feel comfortable.  There are areas that should be avoided at all cost, like the ones pitched to me today.  These are the areas with an abundance of vacant boarded up homes, overgrown yards, high foot traffic during times when individuals should be at work and the overall bad feeling one would get when driving down the street.  Individuals selling this type of Memphis real estate is what gives investors a negative conotation.  Not today, tomorrow or several years from now will these properties pitched to me today be worth anything, unless maybe they find Jimmy Hoffa buried under one of these houses……99.999999% unlikely.

The bottom line is now is a good time to consider purchasing properties in Memphis.  I advise to do business with individuals who:

·         Personally own properties in Memphis, TN (The most important to me)

·         Business is owned and operated in Memphis, TN with individuals calling you from a 901 area code

·         Offer Property Management through a reputable organization

·         Provide references from past clients who own properties in Memphis, TN and can be verified on the Shelby County Assessor webpage

·         Provide references from 1 or more of the following institutions: local Memphis banks, local or nationwide lender, appraisers, local REALTOR or attorney/title company.  Basically someone should have heard of the individual you are conducting business with

Do your homework on the house and individual selling you the house; follow my advice on with who to conduct business with and make sure the house fits your goals.   This is the bare minimum needed to start your successful investment home portfolio.

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