Help analyze Memphis area - 38116

12 Replies

Hello Folks - I have been presented a few properties in the following marked area and would like your input. The properties are in the 38116 zip code and I have seen mixed f/b in BP (including a shooting incident mentioned by). Can you please offer your opinion on whether the marked area is a relatively good working class neighborhood?

Not good, especially for out of state investors.

Dean - can you elaborate? Before I turn down would be good to understand some details.

I would say this area is a little better then the area of 38118 you pointed out in your other post.  

Side note: you should consider finishing your profile by uploading a picture of yourself, makes you more personable.

curt - thanks. Will do in the morning.

@Abdul Azeez ,

Household medium income is generally very well correlated with property classes. A good resource (though it does lag behind the market ~3 years) is CityData. As you'll see, the darker the area marker is shaded the higher the income (you can adjust the opacity by clicking options to see the map easier if desired). Incidentally, the two zip codes you've posted about tonight have medium incomes of $25k and $30k while the medium income for all of Shelby County is $45k. They aren't the worst areas in Memphis but this should clearly indicate that these are C class areas. As you'll see from the map, in general, the farther East you go in Shelby County the higher the property class.

@Abdul Azeez . I am sure plenty will disagree with me but these are C class areas that have been slowly getting worse. 6 years ago we were buying everything we could in there. Now our clients have difficulty getting new tenants, major damage if they are vacant and all the other things that happen when an area is slowly de-gentrifying.

If you buy into a marginal area now, as an out of state investor, you are signing up to possibly declining values and more and more problems if the area continues to decline.

I was told when I started investing in Memphis that as the population grows the higher demographic keeps moving East leaving the poor folks behind. As a non American this sounded fanciful but I have watched it happen over 6 or 7 years. It's sad but true. Even Cordova is significantly worse than 5 years ago. 

So all I am saying is buy in the best area you can, don't be attracted by high paper yields that may get you little in your jeans every week. Especially maintenance and turnovers can really hurt you in these areas these days.

NOTE: The one glowing exception to this is 38128. Raleigh has always been pretty good and seems to hold its own over the long haul.

@Abdul Azeez I'd be happy to take a look at the property. My team serves as the "boots on the ground" for several out of state investors. We would be happy to help with anything you need. I have a home on Mary Jane Ave that is near this area, it is a 3bed 2bath with 2 car carport. I've had better luck in the Whitehaven area with 3bed 2bath homes than I have with 1bath homes... Renters seem to want that 2nd bath.

Overall Whitehaven is a great place for rental homes. However, it can be street by street in 38116 - you have to know the area! 

Other homes we own in the area:

Richland Drive 1000 block

Algiers Drive 5200 block

Lochinvar Road 5300 block

Kilarney Ave 1600 block 

So, I spend a lot of time in this area and our rental homes do very well! 

@Abdul Azeez My clients are having a lot of success in those areas. Its by the airport which lends to FedEx employees (Hub Employees) and our large distribution presence in that immediate area keeps the rental market strong. 

Others will disagree but I have 3-5 clients with multiple properties in 38118 and 38116 and they rent quickly and for 90-100% of the market rent. I am happy to answer any questions for you but I like the area and so do my local and national clients. 

Good Luck!

This is all great info! If I could chime in, what do you all think about the University of Memphis area? Would this be a good area to buy? Also to clarify did I understand that it's best to buy in (1st) Whitehaven then the East Memphis area? Would you all say that every area has "good pockets" or should we avoid these "pockets" and take into account the overall neighborhood instead? My intent is to buy these properties to keep/then rent.

@Dean Harris , @James Wachob ,

What do you think of Royal Oaks Cove in Memphis, TN 38116?  I'm considering a property there.  The thing that concerns me a little is that another out-of-state investor is selling and he bought it about two years ago.

@Mark S.

I like this area. You can get $825 in rent from a 3 bedroom home over there. Like anything in Memphis, you have to buy it right but I do like this immediate area in 38116 and there is a great tenant base over there since it is near our airport where we have a ton of jobs! PM me if you have further or more detailed questions! I am happy to help!

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