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.
Must have more than 1250 sq/ft. Very large homes usually mean more people and high wear. Very small homes are less marketable.
Home must have 1 ½ or more bathrooms. 1 bath limits rental pool.
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.
Home should cost less than $100,000. This will stretch your dollars and help diversify among more homes.
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.
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.
In short, the previous tenant finally moved out and we just on-boarded a new tenant.
The previous tenant didn't pay any rent from May thru October when she moved out she moved out. We never got an eviction through either (was it filed, not entirely sure since no one sent me any documentation). While this is just part of being a landlord, my disappointment was in the passive approach taken by the Property Manager and Branch Manager. Finally, I elevated the issue to Terry Kerr himself who was able to get his folks to physically go to the property and check the health and safety of not only the tenant, but also the functional systems of the property itself. In doing so, we immediately found out the home was in fact vacated----why did it take an inquiry from the owner to the company founder to do this, I don't know.
Upon leasing the property again, I asked to see a copy of the tenant screening documents, but was denied by the Branch Manager. All in all, the company is great when things are going well; but not so much when issues arise.
Hi Damon, thanks for the response. You have a lot of patience. I guess the lesson learned for all of us is to escalate quickly to the owner of the property management company in order to get anything done.
Real Estate Agent · Portland, OR · Member since 2014 · 42 posts · 23 votes
4y
@Erica Allen Sorry I missed this earlier! Yes. I now have 2 Midsouth properties, the first one I've owned now for about 2 years and the second one for about 10 months. So far so good! I did have the opportunity to drive by the first one and walk through the rehab action on the second (since the rehab wasn't quite finished when we were in Memphis). I would, and do, recommend MidSouth HB. I tell people it's a Win Win Win Win. 1) the rehabbers win on the profit from the sale to you. 2) Their property management wins on that monthly income 3) the tenant wins because they get essentially a new house at a fair price. 4) you win on your passive income. I don't get to know these tenants like I do on the properties I manage myself but I hope for the best, and so far so good! On another note, rents have been going up across the nation, and it sounds like the MidSouth philosophy is flexible, but they try not to make any changes at the first renewal. I was anticipating a small bump last year. I'm not saying it's a bad philosophy to keep the rent the same, but you can't assume anything. You need to communicate. I only expected it (but my fault for not speaking up) because prices on housing, purchases and rents, have skyrocketed in the past couple of years. What did you end up doing? Did you purchase a MSHB house?
In looking over the properties available in MidSouth, it seems the cost of the properties are now much higher (as is everything else). Looks like minimum is not around $120,000 for a property.
Investor · Bay area · Member since 2020 · 9 posts · 5 votes
4y
We have been on their waitlist for some time and it looks like we've finally bubbled up to the top and started getting some potential investment opportunities with midsouth. However, with the recent fed rate hikes and mortgage rates, we are wondering if now is a good time to invest in real estate. We still seem to make some cash flow though.
What does everybody think? Also, experienced midsouth investors, do you see property appreciation on Zillow/redfin to match their rehab work?
I have experienced most of the issues mentioned in this thread. Their property management is lax with issues and not great with communication. We have had a few repairs that make us question the quality of the rehab. And, they make it sound like you are guaranteed rent for the first year, but read more closely. We just barely got a tenant evicted before the 1 yr mark (their guarantee is to re-lease if it is VACANT within the first year). And for how they brag on the quality of tenants we find we just had our 2nd eviction within the first year of ownership. Suffice to say, it's been a bit rough.
Turn key is a great way to get started in real estate, and the prices in Memphis are hard to beat, but I do not recommend Mid South at this point.
Investor · Imperial Beach, CA · Member since 2017 · 25 posts · 21 votes
2y
As far as Turnkey goes, Midsouth homebuyers have been the best. They are the only ones I recommend to my friends and family. Nothing is perfect and turnkey is tough. I'll take recommendations on any other turnkey that is better.
Memphis, TN · Member since 2021 · 82 posts · 37 votes
2y
@Charles Wilson I've heard great things about their company! I know there are a good amount of investors on this website who have used them as well. Wish you all the best on your future real estate investments.
Investor · Hermosa Beach, CA · Member since 2016 · 44 posts · 13 votes
2y
Midsouth Homebuyers is pretty bad at property management----great at customer relations for purchasing property, but do not know how to manage properties. They do not protect the interests of the owners, instead put the interest of the tenant ahead of yours. DM for specifics, but I do not recommend using them.