MidSouth Home Buyers

[Charles Wilson]

Has anyone used Mid South Homer Buyers in Memphis to purchase passive income properties.  Looking for some feed back.

[Brandon Riahi]

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