MidSouth Home Buyers

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Brandon Riahi
Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
10y

Sure - I may be out of town so here is something that may help ...

These are general rules we use but not set in stone. Since there is so little time to react after they send out their email; here are the general rules we use to decide quickly.

  1. Must have more than 1250 sq/ft. Very large homes usually mean more people and high wear. Very small homes are less marketable.
  2. Home must have 1 ½ or more bathrooms. 1 bath limits rental pool.
  3. Home must Cash flow at greater than 1%. For example: Home rent $850/ Home cost $77,700 = .011 or 1.1% When we see this % drop below 1% we stop buying in this area. If no areas are at 1% or greater, build up cash reserves as there will be a real estate correction soon to take advantage of. We prefer 1.1 or greater as this creates a larger buffer.
  4. Home should cost less than $100,000. This will stretch your dollars and help diversify among more homes.
  5. Breaking the rules: We will only break a rule if the % return is crazy good. We say one with 1 bathroom but with a return of 1.6 although we did not end up getting it. We don't break the return rule.
  6. Additional rule : Do a Yahoo search "Memphis poverty zip codes" or something similar (select images) to help you select your target zip codes when you see them posted. Do this before hand mainly to determine if there are zips you want to avoid or at least areas within those zips.

Hope this helps

14Reply
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  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    Hi, @Charles Wilson.

    There are several active BP members who have used Mid South.  I'm sure they will pipe up shortly.

    Personally, I have never used Mid South to buy properties, but I have an outstanding working relationship with them (we are friendly competitors here in Memphis).  Plus, I have heard great things about their turnkey products and their property management.  Lastly, I know the owner very well and he is first class!

    The only negative I have seen with them is the same negative with all turnkey providers - an owner who wants to sell a turnkey property within the first couple of years of the purchase, which usually ends up bad for the investor.  That said, the majority of us in the BP community agree that turnkey investing is for the long-term not for short-term flipping.

    As long as you are clear with that on the front end, I highly recommend you talk with Mid South.

    Best of luck to you!

    Investor's Guide to Memphis Real Estate
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    6Reply
  • Kevin Darrell
    NY · Member since 2015 · 101 posts · 43 votes
    10y

    @David Hutson

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

    As long as your buying a home with a purchase price of $60,000 or higher and not in the zip code of 38127 you should do well. 

    Curt Davis - KAIZEN Realty538 Reviews
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    4Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    10y

    Terry Kerr is a good guy; I am having dinner with him next week.

    901-848-9028
    3Reply
  • Charles Wilson
    OP
    Hearne, TX · Member since 2014 · 68 posts · 20 votes
    10y

    Thank you, I do plan on the long term ownership of the property. I own one house in Memphis already that I purchased thru Memphis Invest. I bought it with cash from a Sol401K. I am looking to pull money from a IRA to leverage purchase of of 4 to 5 more properties. I want to start to create cash flow. I am just looking at my options.

    2Reply
  • David Hutson
    Rental Property Investor · Bartlett, TN · Member since 2013 · 404 posts · 421 votes
    10y

    I buy from them.  I focus on homes in the 75k price range.  the service is great and I have never had an issue.  message me if you have specific questions. 

    7Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    10y

    @Charles Wilson

    You certainly have several options in our market for companies to work with. 

    Good luck!!!

    Curt Davis - KAIZEN Realty538 Reviews
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    0Reply
  • Roxanne Baisden
    Property Manager · Yorba Linda, CA · Member since 2015 · 11 posts · 5 votes
    10y

    Ever heard of Memphisinvest.com?  This is one I am currently looking into for investing in Memphis.

    1Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    10y

    @Roxanne Baisden

    Great company.  

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
  • Charles Wilson
    OP
    Hearne, TX · Member since 2014 · 68 posts · 20 votes
    10y

    Memphis Invest is a great company. I have bought two properties from them. One in Memphis and the other in Ft Worth

    1Reply
  • Roxanne Baisden
    Property Manager · Yorba Linda, CA · Member since 2015 · 11 posts · 5 votes
    10y

    Thanks! My confidence in working with them just went up a few notches! 

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    10y

    Hey @Charles Wilson!  I like Terry Kerr a lot and he has a very good reputation here in Memphis.  He has been in the business for a while and as you can see from comments on here, has built a good reputation over that time.  As you know, Memphis Invest only works in certain parts of the city due to efficiency and I think we rarely compete with Mid-South for properties.  In the areas and price points that Terry and his company work, there are few that do it better or know how to manage, so if that is the price point you are looking, he is a good guy and good company to review.

    Best of luck to you and be sure to let me know if I can personally do anything for you!

    All the best - Chris

    Podcast Guest on Show #224
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    1Reply
  • Haim Mamane Palman
    Investor · San Francisco, CA · Member since 2013 · 147 posts · 97 votes
    10y

    Mid South Home Buyers is a great company. I had a chance to meet with the owner Terry Kerr and the Aquisotion Manager Chris Ulander three weeks ago when I was in Memphis. They are both true professionals and cool people and they have an impressive operations. Definitely recommend their services. 

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

    @Charles Wilson

    Mid-South Homebuyers is a great company, the owner is also A+++ I meet him at a MIG meeting about a year ago, gave me some great advice about REI...

    0Reply
  • Brandon Riahi
    Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
    10y

    Have a number of properties with them. Found their whole process awesome; friendly people that are hands on that make taking the leap easy. They are also truly manage the properties so you don't have to. The only issue I have had is vacancy or more specifically collections. Our first year was amazing but the second half of 2015 wasn't great. In November we had issues with 1/3 of our properties. In December 1/5. They range in price between 50-90K (mostly around 75K). The rep said this was very unusual. Maybe its just bad luck. If it continues, its either price point, zip code, or management. We are waiting to see if this improves before we commit to adding more in TN.  If I could give any advice, it would be to scale in slower than we did and diversify across markets. Also, get a good feeling of the areas in a city to avoid - you don't want to sell a turnkey for a while after you buy - it needs to be a long term hold. There are quite a few companies that operate in TN with good reps. We are looking at some other states right now and I'm searching for reviews from people that have used a company for more than a few years and with multiple properties to help with our decision.

    2Reply
  • Yasir Lillingston
    Investor · De Pere, WI · Member since 2015 · 16 posts · 8 votes
    10y

    I' man out of state investor and I'm planning on buying a home from Midsouth in the next couple of weeks. Thinking long term hold. 

    @Brandon Riahi, I'll be interesting to know how January turns out to be and see if what you are experiencing is more of a trend than a blip. Hope fully you can update us later.

    I'm also looking to buy at least one more property this year in a different state than TN.

    Thanks, Yasir.

    1Reply
  • Petru Popovici
    Investor · Littleton , CO · Member since 2014 · 30 posts · 10 votes
    10y

    I have 4 properties through them and am in the process of buying another one currently. I have been pretty happy. I did have one tenant move out after a year and they did about 800 in damage...which actually Midsouth was nice enough to split with me. I had one lady file for Bankruptcy and i'm receiving two months of her rent from the bankruptcy court, she is still living there and hasn't miss a payment since.

    I have had the properties for 2 years now.. all the numbers add up. 

    0Reply
  • Brandon Riahi
    Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
    10y

    @Yasir Lillingston January had slight improvement only. They just changed the tenant liazon so we'll see how that goes. Id be happy to update anyone through pms in the future. Love the company and its people just hoping this area continues to improve as these are the "good times". Have had dry powder for a while, but can't commit more until this improves, so may just turn to other markets ie ohio and indy.

    Cheers,

    Brandon

    1Reply
  • Yasir Lillingston
    Investor · De Pere, WI · Member since 2015 · 16 posts · 8 votes
    10y

    @Brandon RiahiThanks for the update.

    I should be selecting a property in the next couple of weeks.  Wondering if I can reach out to you to run the numbers and feedback on property location.

    Thanks.

    0Reply
  • Brandon Riahi
    Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
    10y

    Sure - I may be out of town so here is something that may help ...

    These are general rules we use but not set in stone. Since there is so little time to react after they send out their email; here are the general rules we use to decide quickly.

    1. Must have more than 1250 sq/ft. Very large homes usually mean more people and high wear. Very small homes are less marketable.
    2. Home must have 1 ½ or more bathrooms. 1 bath limits rental pool.
    3. Home must Cash flow at greater than 1%. For example: Home rent $850/ Home cost $77,700 = .011 or 1.1% When we see this % drop below 1% we stop buying in this area. If no areas are at 1% or greater, build up cash reserves as there will be a real estate correction soon to take advantage of. We prefer 1.1 or greater as this creates a larger buffer.
    4. Home should cost less than $100,000. This will stretch your dollars and help diversify among more homes.
    5. Breaking the rules: We will only break a rule if the % return is crazy good. We say one with 1 bathroom but with a return of 1.6 although we did not end up getting it. We don't break the return rule.
    6. Additional rule : Do a Yahoo search "Memphis poverty zip codes" or something similar (select images) to help you select your target zip codes when you see them posted. Do this before hand mainly to determine if there are zips you want to avoid or at least areas within those zips.

    Hope this helps

    14Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    10y

    @Brandon Riahiwhat if a home rented for $950 and sold for $99,500 but property taxes were $500 cheaper a year then a home that rented for $950 and sold for 93,000? 1% rule is a good benchmark, but property taxes should be heavily weighed. 

    901-848-9028
    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    10y
    Brandon Riahi I don't entirely agree with "Home should cost less than $100,000. This will stretch your dollars and help diversify among more homes." It depends if your plan is to buy more than 10 then as you know you can only get 10 Fannie Mae loans it would be silly to waste your finite loan slots on silly 60-70k properties. Plus your lenders will go crazy with you pain in the butt loans and your fixed lending costs will be a higher percentage.
    0Reply
  • Account Closed
    Registered Nurse (ICU) · San Jose, CA · Member since 2014 · 496 posts · 332 votes
    10y
    Charles Wilson I have been networking like crazy over he past year and Mid South Home Buyers is a name that comes up frequently, and everyone has nothing but good things to say about them. They are one of the few providers I am interested in working with sometime in the future.
    0Reply
  • Brandon Riahi
    Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
    10y

    @Lane Kawaoka

    1Reply
  • Brandon Riahi
    Investor · Dallas, TX · Member since 2015 · 27 posts · 28 votes
    10y

    I had have had a few folks ask for updates so I thought I'd just do a quick post. After a couple of operating years I'd say that I have had mixed experiences. I have purchased a number of homes through them. They make buying super easy and are very friendly and responsive people to work with. I would say the first year and a half were amazing 10+ % returns. Our returns have diminished since mid 2015 primarily due to vacancies and more recently - repairs. Love the folks enough to hang in there longer but have stopped purchasing until I can see the trends reverse. Had a return of 6.84% in 2015. The first 6 months of this year we were at 8.39% annualized and the last 3 months were really bad- dropping that return to 7.44% annualized - with the toughest months ahead. This is primarily due to repairs in the last 3 months of 13%, 32% and 23% and a vacancy in each of the last 3 months (plus just informed of one more). Still if we can net around 7% by year end its not that bad - but not great either, for the risk. Below that and I believe you can find better returns elsewhere; that are much more liquid or at least provide some upside. I would say if you do proceed, make sure you have put enough down on the homes that you can cover not getting 50% of your rents (July we received 54% and August 56%). We don't have just a couple homes with them - so that means a whole lot needs to go wrong for that to happen. We recently purchased a home through Memphis Invest. The return starts lower (higher cost property but a higher quality one as well) but its what you keep that counts so we have a wait and see attitude. They have a good rep. If they do well, we have budgeted for 5 more homes with them in 2017 and my uncle is ready for 10 once he sees how we do (fortunately we told him in time to hold off until this or next year). It is true that your operator/manager is vital - but neighborhood quality is just as vital as even the best operator will have a tough time in a poor neighborhood.Hope that helps

    6Reply
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