Memphis Invest

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Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
7y

@Gerry Lopez

Hi Gerry, thank you for taking the time to return my call this afternoon.  After reading your post this AM, I went to work with my team to find out where the communication fell short.  Out of respect, I wanted to make sure that I spoke with you first before responding here on the site.

As a company, our reputation and integrity mean everything and I am glad we were able to identify how our communication could have been better.  Malorie had been in communication with you each week through the process, unfortunately it was not clear to you that we were addressing every item listed in the inspection report.  I think if you and Malorie had been able to connect when she was calling, that phone conversation could have gone a long way in clearing up any confusion. 

When I pulled our team together this AM, I did confirm that electrical, plumbing, mechanical and even a building permit were all pulled for this property and it passed each inspection.  However, there were some basics that we missed.  As I told you, we strive to be excellent in our delivery, but we are far from perfect.  We made some very human errors on this one including the scheduling an inspection before we had completed our punch list work and not being clear enough that each item would be finished.

After our conversation, I think we both agree that we may not be the right fit for your investment needs today and it is best that we not move forward.  We will reimburse your earnest money and the cost of the inspection.  We never want investors to feel pressured on an investment or even worry about earnest money.  

We rarely keep earnest money, even in scenarios where there is no fault.  We want you, as an investor, to be confident in your investments and if not, we are happy to delay and even cancel.  In this case, we are going to cancel the contract.  We will put through the paperwork today and you can expect those monies returned in the next few days.  The house does have a resident moving in on a two year lease on October 1, so I hate that this property is not the right fit, but fully understand. Be sure to let me know if I can do anything further for you.  Best to you ~

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    one of the oldest and arguably most successful In the space.. there are a few up there with them in volume and such... But they have done a great job branding themselves.

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  • Devin Davis
    Rental Property Investor · Memphis, TN · Member since 2014 · 114 posts · 40 votes
    9y

    I have heard nothing but good reviews about em. No experience with them though. 

    2Reply
  • David Hutson
    Rental Property Investor · Bartlett, TN · Member since 2013 · 404 posts · 421 votes
    9y

    I talk to them often.  I have met with Chris Clothier and David Meeks.  They have a first rate operation and they have great homes.  The customer service is excellent.  Definitely worth looking at for homes in the Memphis area.

    2Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    9y

    @David Hutson sounds like you done well in Memphis and happy to continue buying.

    Do you mined sharing if you are buying from turn key and if you managing to buy under retails price and recycle your deposit out, that's assuming you don't buy cash.

    If you don't buy from TK then how do you buy?

    Thanks in advance, Cheers

    1Reply
  • Jeff McIntyre
    Investor · Seattle, WA · Member since 2015 · 10 posts · 9 votes
    9y
    I have invested with Memphis Invest and they are indeed outstanding. I bought my first turn key property with them in summer 2015. I have worked with 3 TK providers total and Memphis Invest is by far the best. Outstanding customer service...higher end properties....great cash flow (on the deal I got in Houston). Definitely recommend them. I will be acquiring my second with them in the next month.
    5Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    9y
    Originally posted by @Anthony Johnson:

    Does anyone have experience with this turn key investment service?

     I believe they are the largest in that area and are well versed in turnkeys in Memphis.

    3Reply
  • Anthony Johnson
    OP
    Real Estate Agent · Manhattan Beach, CA · Member since 2016 · 30 posts · 6 votes
    9y
    Appreciate all the hasty responses!! Will definitely be looking further into the company in the future!
    1Reply
  • Kevin Byrne
    Costa Mesa, CA · Member since 2016 · 19 posts · 15 votes
    9y
    I will be closing on a property with them this week. They are the second TK company I have worked with. I can't speak to the performance of my property yet, but outstanding customer service and experience thus far. Anything that is not done in house feels like an extension of Memphis Invest. By this, I mean the quality of service is just as high.
    0Reply
  • David Hutson
    Rental Property Investor · Bartlett, TN · Member since 2013 · 404 posts · 421 votes
    9y

    @Hadar Orkibi,

    Yes, I like Memphis and will continue to purchase there.  Most of my homes are turnkey and usually a little under the appraised value.  I put 25% down since I have so many loans. 

    I have also purchased off market properties and done some rehab.  It usually doesn't get me much more equity since I can't manage the rehab myself and have to pay for that service.

    Not sure what you mean by recycle the deposit out.  I don't get my down payment back out by refinancing.

    David

    2Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    9y

    Thanks for sharing @David Hutson, yes i was referring to re-financing the deposit out of the deal. 

    when you say "little under the appraised value" are you referring for few grands or do you aim for any percentage? 

    How much per door do you aim to net cash-flow very month?

    Cheers 

    1Reply
  • Roman S.
    Real Estate Investor · South San Francisco, CA · Member since 2016 · 51 posts · 29 votes
    9y

    I am in the process of buying my first property with Memphis Invest as well, though the appraisal came in pretty low, so I am having second thoughts. The sales price is 143k and it was appraised at 123k just yesterday. With this said, they have been very professional and did warn me that this could happen. The worst case scenario that we discussed earlier was 120k appraisal, but I really did not expect that it wold come to this. The main reason, why it was so low is because the backyard is facing a housing complex. It sounds like its a decent complex, but I did see 4 crimes of type "warrant  service" there in the past couple of weeks. I should be able to get $1350 in rent. Thoughts anyone? 

    https://www.trulia.com/property/3209584734-925-Kelley-Dr-Everman-TX-76140

    2Reply
  • Emily Powell
    Investor · Houston, TX · Member since 2014 · 208 posts · 135 votes
    9y

    @David Hutson, @Jeff McIntyre and @Kevin Byrne - How did your appraisals compare to @Roman S.'s appraisal? 

    0Reply
  • Emily Powell
    Investor · Houston, TX · Member since 2014 · 208 posts · 135 votes
    9y

    @Roman S. - has the unit rented in the 25 days since your last post?

    0Reply
  • Kevin Byrne
    Costa Mesa, CA · Member since 2016 · 19 posts · 15 votes
    9y

    @Emily Powell The cost of my house was $135,900 and the appraisal came in at $139,000.   I have had a renter in for 2 months (they got a renter in faster than I could close my loan) and I am still very happy with their product and service. 

    1Reply
  • Emily Powell
    Investor · Houston, TX · Member since 2014 · 208 posts · 135 votes
    9y

    Great to hear.  Thanks, @Kevin Byrne.  

    0Reply
  • Sean Autry
    CPA · Pasadena, CA · Member since 2015 · 170 posts · 46 votes
    9y
    Kevin Byrne , Hi Kevin- I might be looking at this TK company in the coming months. Has it still been a positive experience after another month has gone by? Are you comfortable sharing the numbers on the property you bought? (Particularly post reserves cap rate and cash on cash return) Thanks!
    1Reply
  • Kevin Byrne
    Costa Mesa, CA · Member since 2016 · 19 posts · 15 votes
    9y

    @Sean Autry I'm still really early in the process.  My house was rented out in mid October and I received my first rent check in November and my second in December.  Both on time.

    I wouldn't dare walk into the "cap rate police trap" on this forum. Seems to be a volatile topic lately.  I will share with you my numbers and you can use your own reserves and formulas.

    Purchase price: $135,900

    Rent: $1225 (for year 1, $1275 for year 2, it is a 2 year lease)

    Monthly mortgage with impound account: $771 (20% down, 4.375% interest, 30 years)

     County Tax: $1335, City Tax: $1038, Insurance: $500 (through Memphis Invest, plus a $100 annual administration fee)

    Property management fee: 10% (lease up fee is first months rent)

    Feel free to use your own numbers for vacancy, repairs, cap ex. etc...  I know Memphis Invest is very good with their data and has enough years of tracking the data to be statistically significant.  I'm sure @Chris Clothier could chime in with their historical vacancy rate and other pertinent numbers.

    Besides the numbers, my experience with Memphis Invest has been top notch.  I have dealt mainly with Carol Henderson and Ashley Claunch.  I could not speak more highly of their professionalism and customer service.

    2Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    9y

    Thanks for shearing @Kevin Byrne, can I ask what is your Cash On Cash return? and what CoC do you target for? Also, monthly Net cash flow.

    Cheers and Happy New Year from the first country to see 2017!

    0Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    9y

    @Hadar Orkibi

    Based on the numbers above, It looks like 27k down for a $329 per month positive cash flow after expenses.  About $3800 a year return.

    This does not, however, speak to a lot of the problems with this model.  Memphis is among the leaders in the United States with the highest vacancy rates.  Some of the others are in North Carolina (don't remember which cities, but there are 2 or 3 in NC).  I think Indianapolis is another, but don't quote me.  This can be problematic in attracting future tenants if the present tenant does not stay.

    Btw, many of these TK companies are in these high vacancy cities.  After all, you have to be able to get property on the cheap to make this model work.  ;-)

    From my own research, most of the TK properties at B or C class properties that are older than 20 or 30 years.  That's what is required for that type of return that is stated.  But older properties also have higher expenses and maintenance issues.  Some of which can be large ticket items that wipe out a years worth (or more) of profit.  Older properties in these low cost areas won't appreciate much when compared to better quality properties in better neighborhoods in the same city.

    A loss of your renter could turn disastrous.  It's not a -329 off the $3800 gain, but about $1000 a month.  If your property is being turned yearly, you will lose about another $1000 for the real estate agent to place a new tenant in addition to cost of getting the property back to rentable condition.

    Personally, I think it is a safe bet that an investor would be lucky to clear $2000.  And I believe that would be a 'good' year.  I think many other years would be 'alligator-like' with high maintenance costs.

    But these TK companies are filling the need of getting people into real estate investing.  I just don't think it will be a good experience for most over the long term (5+ years).

    0Reply
  • Rhea Jackson
    Investor · TX · Member since 2015 · 62 posts · 23 votes
    9y
    @Anthony Johnson I am a Buy and hold investor. We bought our first two properties back to back with MI in early 2015. All I can say is nothing but great things about this company. I highly recommend this TK company to my family (who's some who has done business with them as well, and other investors). Their outstanding team of professionalism and customer service are top notch and they treat their clients to make you feel like family (at least in my eyes). Our buying process went very quick and smoothly. Ashley, our portfolio advisor was such a big help and answered any questions we had. They found us tenants who signed 2 year leases before we could close our loan. I did my due diligence on this company for months and we finally decided to get our feet wet. I've met and talk to @Chris Clothier myself as well as all Clothier Senior/brothers rare that this happened) and the awesome team who helped guide us through our buying process. My husband and I will continue to do business with Memphis Invest and couldn't be more than happy with them.
    0Reply
  • Kevin Byrne
    Costa Mesa, CA · Member since 2016 · 19 posts · 15 votes
    9y
    Hadar Orkibi Alan Grobmeier Alan is right. With my fixed costs and no vacancy, repairs, etc... I cash flow $331/mo. I put down $27,180 plus about $4000 for closing costs (let's call it $32k total). Of course, the expenses are coming and I don't expect to cash flow that well on average. Also, I can't tell you how the numbers will shake out in 5 years. Only time will tell. Maybe someone with a property from Memphis Invest that has owned it for longer than 5 years will chime in. For the record, the home was built in 2004.
    0Reply
  • Sean Autry
    CPA · Pasadena, CA · Member since 2015 · 170 posts · 46 votes
    9y
    Kevin Byrne , thank you for sharing your experience and your numbers. Best of luck with your investment! Sounds like a solid ?first? deal!
    0Reply
  • Alan Grobmeier
    Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    9y

    @Kevin Byrne

    I didn't realize this was a newer property.  Most of the TK properties I have seen are older.  Obviously you will do better than if you purchased an older place.

    It sounds like a pretty solid situation.

    Good luck!

    0Reply
  • Chris Depalma
    Investor · Marlboro, NJ · Member since 2016 · 12 posts · 3 votes
    9y
    Originally posted by @Kevin Byrne:

    Hadar Orkibi Alan Grobmeier Alan is right. With my fixed costs and no vacancy, repairs, etc... I cash flow $331/mo. I put down $27,180 plus about $4000 for closing costs (let's call it $32k total). Of course, the expenses are coming and I don't expect to cash flow that well on average. Also, I can't tell you how the numbers will shake out in 5 years. Only time will tell. Maybe someone with a property from Memphis Invest that has owned it for longer than 5 years will chime in.
    For the record, the home was built in 2004.

    You are making 12% COC. Not bad

    0Reply
  • Chris Depalma
    Investor · Marlboro, NJ · Member since 2016 · 12 posts · 3 votes
    9y

    I talked to a person from there. I asked about cap rates and whether i could look over their inventory and pick my property. Guy said no. He mentioned COC 14% and cap rate of 7%, which to me is too low.

    I also wanted property under LLC not my name and he insisted i could not do that had to go through fannie mae. I don't think i can use them.

    0Reply
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