Multifamily in Midtown Memphis - is it worth it?

Question

Hey there.

I currently invest in SFR houses in Memphis, TN that I rehab and rent, I came across a pretty good deal in Midtown Memphis (pretty close to overton park - pretty good location in 38104 zip code), however, its a multifamily - I heard some people talking badly about them in Memphis, so was wondering - is it worth it? Also, what type of tenants does it bring? do I need to supply appliances? Would love to hear some insight from people that specifically invested in multifamily in Memphis (preferably in midtown) about that. The good and the bad.

Thanks guys.

Gus Pacente · Answer

Would agree with Reed.  What edge of Overton Park you're looking at could be a big determining factor - though would could probably guess based on it still being 38104.  Rents had a big increase, as we all know, in 2022 or so, and many buildings are being sold on a promise of similar rents or without taking into consideration a depression in rents.  Our firm manages easily 300 units in the 38104 zip code.  Realizing I'm late to the post, but if you're still underwriting a deal or looking for an opinion with lots of data to back it up, feel free to reach out.

Reed Rickenbach · Answer

Really depends on the micro area. I have owned multifamily in 38104 and had a great experience. It's a popular rental area, both short-term and long-term. You will likely need to supply appliances (other than washer dryer). Tenants could be professionals, students, warehouse, etc. It is an area that is central to the city so your tenants could come from anywhere.

One thing to consider is the age of the property - it is not uncommon to see pre-1920 construction in this area.

Feel free to reach out to me and we can discuss detail - I am a broker.