Recommendations for Memphis, TN

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Recommendations for Memphis, TN

Account Closed
Investor · Memphis, TN · Member since 2015 · 11 posts · 1 vote

Hey guys, my name is Guy, I'm an investor from Israel and started to invest here in the state after recognizing the potential and the recovery here.  I am focusing on Memphis, TN, which I've found as a very good market with a very good yield and potentials. (I had investments in my country but the market became expensive in a ridiculously way). My budget is aroumd 50-60k for the beginning and for now I'm focusing on Buy & hold deals.

Anyway, I need some advices and reccomendations from you:

- what do you think generally on Memphis as a market? (Potential, population, growth, number of foreclosures are available...)

- good areas/zip codes/neighborhoods to focus on?

Thanks!

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Douglas SkipworthBusiness Member
Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
10y

@Account Closed described).

Best regards,

Investor's Guide to Memphis Real Estate
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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    10y

    you won't have any trouble finding homes in the $50-$60k range, what will be difficult is sifting through all bad areas that they will be located in.  There will be a lot of luck involved in this transaction for you. Having a good team is critical but that has its limits for this price range. 

    For example you can buy in frayser 38127 but it's the worst area in Memphis and you could find a nice area of Westwood 38109 for same price points but slightly better area. 

    Good luck , let me know if I can help

    Curt Davis - KAIZEN Realty538 Reviews
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  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    10y

    Hey @Account Closed!!! Welcome to the site! Curt is right location can be tricky in that price point and your success will ultimately hinge on your team on the ground! I know Curt sells properties to out of state investors as do we and there returns are actually better at higher price points. While the cheaper stuff looks better on paper I guarantee that you will experience higher than you think vacancy, higher than you think tenant damage to property and higher than you think vandalism and theft. Purchasing something in the 80k-110k is almost always in the location that attracts a higher quality tenant who usually stays longer. I love investing here and let me know if I can help you in anyway!

    2Reply
  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    10y

    @Account Closed

    Welcome to Bigger Pockets..

    As an experienced investor like you are I would shy away from investing from overseas/out of state without a great team on the ground. Regardless of your price point/budget you are looking to invest. Memphis is not a get rich quick city like the West coast where you can buy a home today and it's worth $10, $20k or $30k more next year. This is a strictly BUY and HOLD Play as you stated we have very little to no appreciation  but our cashflow is much much better than the west coast markets.

    Currently we still have a number of foreclosures that are available but they are far and few compared to just 1 year ago, the market here is stabilizing, we still have a TON of renters here in the city which is Great for REI... I hope this helps!!

    Good Luck and Happy Investing... Let me know if I can help you while you are doing your due diligence on Memphis.

    Kind Regards,

    Derrick

    3Reply
  • Haim Mamane Palman
    Investor · San Francisco, CA · Member since 2013 · 147 posts · 97 votes
    10y

    @Account Closed welcome to BP! I'm from San Francisco (originally from Israel) but invest and wholesale primarily in Memphis and other cash flow markets. A lot of out of state and international investors got burned and as the others stated your team on the ground will make or break your investment. The property management company is probably the most important component as well as buying at the right price and in the right neighborhood - I know that from experience....I purchased from different turn-key companies, I purchased directly from banks at a discount and tried to manage a rehab remotely (not recommended) and I partnered with local investors as well.  I've made mistakes and I have had successes. Turnkey is definitely a good option for international investors and Most of the reputable turnkey providers are very active on BP. Make sure you do your due diligence before making a decision. Feel free to reach out. Good luck 

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  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    Hi, @Account Closed even though we all do real estate investing in Memphis a slight bit differently from each other.  That said, all of us can tell you horror stories and success stories about out-of-town investors with turnkey and turnkey alternatives.

    Here's a good BP article from last month that highlights Memphis as an awersome rental market.

    http://www.biggerpockets.com/renewsblog/2015/10/14...

    You can also learn a ton about Memphis by reading the headlines of the following two online papers every day.

    Memphis Daily News (Daily Real Estate News for Memphis)

    http://www.memphisdailynews.com/

    Memphis Business Journal

    http://www.bizjournals.com/memphis/

    By the way, we have several Israeli clients.  If you send me a private message, I can introduce you to them so they can give you their opinions of Memphis.

    Best of luck to you!

    Investor's Guide to Memphis Real Estate
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  • James Martin
    Property Management · Memphis, TN · Member since 2009 · 667 posts · 362 votes
    10y

    Welcome to BiggerPockets! I would stay away from homes that rent really well in sought after areas. Most of those homes need little to no maintenance once renovated and rents quickly that you'll ask yourself why the h_ll do I need a property manager? (Being Facetious) Honestly, with your suggested budget just make sure the company you decide to work with is well verse in all areas (A class B class D class properties). You may have to start in a less desirable neighborhood, but hurriedly upgrade when your budget allows. 

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  • Account Closed
    OP
    Investor · Memphis, TN · Member since 2015 · 11 posts · 1 vote
    10y

    Thank you so much @Douglas Skipworth 

    @James Martin 

    @Haim Mamane Palman @Derrick Craig@Stephen Akindona@Curt Davis!! I really appreciate all of your help! To be honest it's really surprised me how fast the community here provides information, advises and the willing to help.

    In any case, I  agree 100% with all of you guys, and that's exactly what I'm building now - a strong and good team that eager to work and have an investor (actually a group of investors)  for a LONG TERM, which I truly believe in. I know that the fall or rise will be effected from the foot on the ground.

    I know as well, from friends of mine that also experienced Memphis and invested there, that you can find nice properties with a good cash flow in good neighborhoods. I'm aware that zip codes like 38141, 38128, are not the best zips, but I am also aware that you can find great 40-60K properties (don't have to be only turn keys) in areas of 70-80K with the right people.

    what's your opinion about it? 

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  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    10y

    I think your absolutely right! You can find those deals. Personally I love the 38128 zip, anything east of Austin Pea. I buy those deals in the 40-50k range put 10-15k in repairs and rent for 950-1050. All while getting appraisals in the 90-110 range. So it's doable but it comes down to knowing the neighborhoods, knowing the streets and acting very quickly when an opportunity presents itself. 

    1Reply
  • Haim Mamane Palman
    Investor · San Francisco, CA · Member since 2013 · 147 posts · 97 votes
    10y

    @Account Closed I'm not local but from all the local investors I talked to and from what I have seen you can have great streets and terrible streets in the same neighborhood let alone in the same zip code. 38128 is a huge zipcode and you can find good properties there in your price range. As long as you have the right team....I actually own a property in that zipcode and it's been great. 38141 is also not a bad zipcode and most of the turnkey providers offer properties in that zipcode. Again, it's street by street and your boots on the ground can give you better feedback. 

    0Reply
  • Willem Young
    Real Estate Professional · Jacksonville , FL · Member since 2015 · 112 posts · 13 votes
    10y

    We're not involved in Memphis but instead offer turnkey real estate investments in Chicago.   We have found that to be successful, you can't go by zip but rather block by block, street by street.  Especially if you're looking for a good deal.  I would agree with some of the previous comments that you need a strong team with boots on the ground and experience to work with to minimize the downside.   Initial construction quality and a good property management relationship is very important.  The cash flow can look great but especially with lower cost housing, you can get eaten alive by the maintenance costs without the right construction and property management relationships.  Hope this helps.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    10y

    Stephen, the prices you and I buy our primary investments for are different as no one is selling a home for $65k that rents for $950-$1000.  It can give a person looking at turnkey a slight false sense of reality. 

    I also love how the guy at the end throws out Chicago homes when they guy is looking at Memphis. 

    Curt Davis - KAIZEN Realty538 Reviews
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Account Closed  Douglas's partner has some new construction deals you may want to look at... years of trouble free service and top notch tenants.. take a look at those deals.

    I bought new construction I Madision MS in 07 and in 3 of my homes the same tenant has been there.. NONE are section 8 and they are a dream boat compared to the lower end 40 to 60k homes I owned.. and I owend at one time about 350 of them  LOL.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    10y

    I will break this down real simple.

    • If you want 40 to 60k, visit Memphis, due a ton of due dilligence.  Talk to non turnkey Property Managers
    • Think about raising your standard to 80 to 129k 
    • Ready my blog on C class and whether or not you can make money.  The answer is yes, but are you up for the work that goes into owning them as a out of state investor.http://www.memphisturnkey.com/money-class-properti...
    • Come to Memphis, go to Beale St, order the ribs from Blue City Cafe
    901-848-9028
    1Reply
  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    Thanks for the shout out @Jay Hinrichs!  The build-to-rent houses that James Wachob sells for his clients in Memphis are definitely a good option for certain investors.  

    @Account Closed,

    Here's a website with census data on Memphis zip codes.

    http://www.city-data.com/zipmaps/Memphis-Tennessee...

    As for 38141 and 38128, those are decent zip codes.  The are not the highest rent rates in town, but they are definitely not the most challenging parts of town either.

    Have you used Zillow to get a high-level sense of what sales prices and rent rates are in certain areas?   That might be a good way to start if you're not set on the $50-60k entry point you mentioned originally.

    With the right local partners, I have no doubt that you can be successful doing whatever you want to do in Memphis.  BiggerPockets is definitely the place to find and vet those partners (as you are witnessing with this post)!

    All the best,

    Investor's Guide to Memphis Real Estate
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  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    Good post @Alex Craig.  Glad you jumped in, too!

    Investor's Guide to Memphis Real Estate
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  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 887 votes
    10y
    Originally posted by @Account Closed:

    Hey guys, my name is Guy, I'm an investor from Israel and started to invest here in the state after recognizing the potential and the recovery here.  I am focusing on Memphis, TN, which I've found as a very good market with a very good yield and potentials. (I had investments in my country but the market became expensive in a ridiculously way). My budget is aroumd 50-60k for the beginning and for now I'm focusing on Buy & hold deals.

    Anyway, I need some advices and reccomendations from you:

    - what do you think generally on Memphis as a market? (Potential, population, growth, number of foreclosures are available...)

    - good areas/zip codes/neighborhoods to focus on?

    Thanks!

     Guy, 

    In the $50-$60k range I've done well in Millington. Just picked up a new one & put it on my website. 

    Also 38134, 38141 -  I have some good homes available in you price range. 

    Jw

    1Reply
  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    10y

    "I'm aware that zip codes like 38141, 38128, are not the best zips, but I am also aware that you can find great 40-60K properties (don't have to be only turn keys) in areas of 70-80K with the right people.

    what's your opinion about it??"

    I totally agree with your statements above as long as you have the right team on the ground you don't have to go with any turnkey type of investment. Also 38141 is not a bad zip code nor is 38128. Good luck and happy investing.

    0Reply
  • Account Closed
    OP
    Investor · Memphis, TN · Member since 2015 · 11 posts · 1 vote
    10y

    Thank you all! Really appreciate that. 

    I agree and know everything you wrote. I definitely need foot on the ground.

    Can you be more specific? 

    - On agents/realtors/wholesalers.

    - On management companies that you had good experienced with.

    - On good zip codes/neighborhoods/areas.

    Thank you again!

    0Reply
  • Jesse Richardson
    Lender · Vacaville, CA · Member since 2015 · 58 posts · 21 votes
    10y

    Guy,

    I own 4 properties with MidSouthHomeBuyers.  They focus on the lower end neighborhoods, like Frayser, and other similar areas.  I have good cash flow through them and I bought my properties in the 58-78k range.  it's going well and their property management is very good.  They are strict with their tenants, and the remodels are great.  They email you a statement every month and I get an email from Jen letting me know of any issues or late payments that I had.  

    There's a lot of buy and hold in Memphis because the market is great for that. So be careful because it might be a little over saturated now. MemphisInvest, which is a much bigger company, has a very similar style business plan; the main difference is they focus on the B class neighborhoods, but their price points are much higher (of course). With them, you'll get about a 10% ROI.

    I'm actually working with the Holton-Wise Property Group with James Wise (Podcast #127).  It's slightly different in that, they don't fix the property until you buy it. They're a much smaller company, but they are growing fast.

    Good luck,

    Jesse

    2Reply
  • Kevin Darrell
    NY · Member since 2015 · 101 posts · 43 votes
    10y

    @Jesse Richardson, so would you say Midsouth focuses on C and D class areas?

    1Reply
  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Account Closed described).

    Best regards,

    Investor's Guide to Memphis Real Estate
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  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 887 votes
    10y

    thanks for the endorsement!

    1Reply
  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    10y

    @Curt Davis yes, you are absolutely right! There is no way to find that kind of a deal through a turn key operator! I was just letting @Account Closed know that the deal itself existed. Guy you will most definitely pay a mark up to use a turn key operator and there is valuable trade off in doing so, but just to make sure you are aware those are not turn key examples!

    1Reply
  • David Hodge
    Rental Property Investor · Laguna Niguel, CA · Member since 2015 · 142 posts · 98 votes
    10y

    @Account Closed!  It's in 38115.  Working with Curt has been so easy and stress free.  I would definitely recomend you include him in your list of providers to contact.  Feel free to message me with any questions!

    4Reply
  • Jesse Richardson
    Lender · Vacaville, CA · Member since 2015 · 58 posts · 21 votes
    10y

    Yes, C- most likely, maybe D, but they know their market well.  It's not the "warzone" but they are not a decent B class neighborhood. 

    2Reply
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