Mid South Home Buyers - Looking for reviews

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Mid South Home Buyers - Looking for reviews

Account Closed
New York City, NY · Member since 2015 · 38 posts · 14 votes

Hope everyone's enjoying the holidays!

A friend recently introduced me to this management group in Memphis called midsouthhomebuyers. I'm currently on their waiting list and figured I'd poke around in the meantime and find people who have done business with this group before who would be willing to share their experiences.

Anyone worked with this company before? If so, could we hop on the phone for a few minutes for a quick chat about your experience?

P.S. If you're in the New York area, I'll treat you to lunch to discuss the numbers.

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Douglas SkipworthBusiness Member
Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
9y

Hi, @Account Closed.

I know the folks at Mid South Home Buyers very well.  In fact, I met with them at their warehouse two days ago.  They are first class operators and really fine people.

It is my observation that they have hundreds of satisfied customers worldwide.  And, they have a great reputation locally.

Hopefully, you'll have the same experience.

Best wishes to you on your journey to real estate investing success!

Investor's Guide to Memphis Real Estate
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  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 888 votes
    9y

    @Account Closed I'm based in Memphis and would be happy to introduce you to my friends. Lets connect.

    0Reply
  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    Hi, @Account Closed.

    I know the folks at Mid South Home Buyers very well.  In fact, I met with them at their warehouse two days ago.  They are first class operators and really fine people.

    It is my observation that they have hundreds of satisfied customers worldwide.  And, they have a great reputation locally.

    Hopefully, you'll have the same experience.

    Best wishes to you on your journey to real estate investing success!

    Investor's Guide to Memphis Real Estate
    View Page
    6Reply
  • David Hutson
    Rental Property Investor · Tampa, FL · Member since 2013 · 404 posts · 421 votes
    9y

    @Account Closed,

    I have several homes with them.  Their business model works great for keeping long-term tenants.  The customer service has always been great and they continue to grow.

    I was out there earlier this year and walked through their new offices and warehouse and they are expanding.  They do hundreds of rehabs every year I believe they will continue to expand. 

    Send me a message if you have specific questions.

    David

    3Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    @Account Closed, I'm glad to hear their business model is working well for tenant retention.  The whole idea of keeping rents slightly below market in order to keep tenants longer and minimize turnover seems like a great idea.  I am also looking to acquire several homes with them over time.  They told me investors right now can generally buy 2-3 homes per year with them.  Do you care to share some numbers?  You can PM me if you'd rather take that question offline, if you're willing to answer.

    0Reply
  • David Hutson
    Rental Property Investor · Tampa, FL · Member since 2013 · 404 posts · 421 votes
    9y

    @Mark S.,

    I make about $180-$200 after taxes, ins, PM, vacancy and repair fund.  The turnover is low and they rerent the homes quickly.  I have five houses with them and only one turnover.  That home was cleaned up quickly and rerented in under a month.  Message me if you want specifics.

    David

    5Reply
  • Douglas SkipworthBusiness Member
    Rental Property Investor · Memphis, TN · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    Hi, @Mark S.

    We are friendly competitors with Mid South so I don't buy from them!

    Investor's Guide to Memphis Real Estate
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    2Reply
  • Account Closed
    OP
    New York City, NY · Member since 2015 · 38 posts · 14 votes
    9y

    Thanks for the feedback, they seem like a very reputable provider and most people who recommended them seem to be generally happy. I'm currently going over their listings.

    I also want to do a bit more research on the location of Memphis, TN before proceeding though, as I've came across mixed information on the city, both positives and negatives. On the one hand, it seems like Memphis has excellent cash flow opportunities. On the other hand, I'm a bit worried about what the numbers would look like once adjusted for vacancy, capex, repairs, etc. The historical vacancy rate data seems to be higher than other cities at the time of this post ( http://www.deptofnumbers.com/rent/tennessee/memphi... )

    Thoughts?

    2Reply
  • Michael Eng
    New York, NY · Member since 2016 · 44 posts · 13 votes
    9y
    Chiwei C. I'm in the exact same situation as you brother! From NYC but looking to buy from a turnkey provider. Is there any reason you chose Memphis over say Dallas or Houston? As for your Memphis question, I think it has to do more with your property manager than average percentages. I think Mid South Home Buyers have a 98% occupancy rate. I think another company Memphis Invest im working with has an occupancy rate of 96%. Have you considered working with them?
    1Reply
  • Pam Schuster
    Investor · San Diego, CA · Member since 2014 · 36 posts · 13 votes
    9y

    I have my 2nd Memphis property with Midsouth which I bought this past spring.  Not too much to go on but so far I have been happy.  I know it is scary investing out of state but I think it is good for diversification.   My 2 cents

    1Reply
  • Account Closed
    OP
    New York City, NY · Member since 2015 · 38 posts · 14 votes
    9y

    Thanks @Pam Schuster and @Michael Eng,

    Great to meet a fellow New Yorker by the way. I sent you both a message, let's connect and we can share our research on the markets and providers.

    0Reply
  • Andrew Frishman
    Ridgefield, CT · Member since 2017 · 101 posts · 60 votes
    9y

    Any updates? Reviews...since previous comments...looking to potentially work with Mid South Home Buyers..

    0Reply
  • Account Closed
    OP
    New York City, NY · Member since 2015 · 38 posts · 14 votes
    9y

    Just put a house on contract with them recently. Will be happy to answer any questions. Andrew, sent you a PM.

    I'll be in Memphis from July 22-25 if anyone in the area wants to meet up.

    1Reply
  • Brandon Williams
    Investor · Memphis, TN · Member since 2016 · 29 posts · 20 votes
    9y
    Chiwei C. I work with Douglas Skipworth and his company. I highly recommend meeting with them while you are in town.
    2Reply
  • Willie Brown
    Investor · Imperial Beach, CA · Member since 2017 · 25 posts · 21 votes
    9y

    I bought a house from Midsouth about 8 months ago and have nothing negative to say. Communication is top notch and I feel good knowing the rehab is extremely thorough! I'm currently in contract for my second property with them as we speak! I'd love to buy a 3rd from them, but I know I need to diversify at this point. Is there any other turnkeys as great as Midsouth? Right now I'm leaning on Ohio Cashflow based on their stellar reviews. 

    2Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y
    I'm under contract with MSHB now on my first rental and back on the waitlist, which I'm told is about 6 months. So far, so good but we're in very early stages. Rent to value on my deal came out to about 1.05%.
    1Reply
  • TJ P.
    Investor · WI OH · Member since 2015 · 113 posts · 36 votes
    9y
    Originally posted by @Mark S.:

    I'm under contract with MSHB now on my first rental and back on the waitlist, which I'm told is about 6 months. So far, so good but we're in very early stages. Rent to value on my deal came out to about 1.05%.

      Thanks for giving some specifics.

    If you don't mind sharing, how's that working out in cash flow for you?

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    @TJ P., as you might expect, there are two sets of numbers: their proforma and my projections.  Obviously, I'd much prefer their numbers, but I think they're overly optimistic.  Here's a rough breakdown:

    The Property Details
    3/2 SFR at $84,000 investor purchase price
    Rental Income: $885/month ($885/$84,000 = 1.05% rule)

    Their proforma numbers indicate an ROI of 29% and monthly cashflow of $407. By default, their proforma numbers don't include them managing the property (not sure why), so take off 10% of gross rents and their proforma cash flow number is $318.50/month.

    My projections have the following assumptions:
    20% down, 30-year fixed, 5.125% interest rate: $365.90/mo debt service
    $43/mo property insurance (actual quote)
    $95/mo property taxes
    8% vacancy loss (or 1 month per year)
    5% ongoing maintenance
    5% cap-ex reserve (since property is fully rehabbed at purchase; if it weren't, I may do 10% here)
    10% property management fee

    My estimated monthly cash flow number with the above assumptions: $133/month. Hopefully it performs better than this, but I feel it's a pretty conservative estimate. When I calculate total return: principal paydown, tax benefit of interest deduction on mortgage, cash flow, (I assume 0% appreciation), I am somewhere in the mid teens in terms of total ROI.

    3Reply
  • TJ P.
    Investor · WI OH · Member since 2015 · 113 posts · 36 votes
    9y
    Originally posted by @Mark S.:

    @TJ P., as you might expect, there are two sets of numbers: their proforma and my projections.  Obviously, I'd much prefer their numbers, but I think they're overly optimistic.  Here's a rough breakdown:

    The Property Details
    3/2 SFR at $84,000 investor purchase price
    Rental Income: $885/month ($885/$84,000 = 1.05% rule)

    Their proforma numbers indicate an ROI of 29% and monthly cashflow of $407. By default, their proforma numbers don't include them managing the property (not sure why), so take off 10% of gross rents and their proforma cash flow number is $318.50/month.

    My projections have the following assumptions:
    20% down, 30-year fixed, 5.125% interest rate: $365.90/mo debt service
    $43/mo property insurance (actual quote)
    $95/mo property taxes
    8% vacancy loss (or 1 month per year)
    5% ongoing maintenance
    5% cap-ex reserve (since property is fully rehabbed at purchase; if it weren't, I may do 10% here)
    10% property management fee

    My estimated monthly cash flow number with the above assumptions: $133/month. Hopefully it performs better than this, but I feel it's a pretty conservative estimate. When I calculate total return: principal paydown, tax benefit of interest deduction on mortgage, cash flow, (I assume 0% appreciation), I am somewhere in the mid teens in terms of total ROI.

     Forgive me for not looking at your previous posts but a couple of follow-ups:

    - What # is this with MSHB?

    - Have you tried any other TK providers?

    - Why not purchase locally; You're near EKU, correct?

    - Was that a local lender with those terms you listed?

    Thanks again- Great detail!

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    @TJ P., this is property #1.  I'm also looking at Spartan Invest in Birmingham, AL.  I went out and met the team there and am on a waitlist.   Yes, near EKU. I have no desire to self-manage/rent to college students.  The lender is a national lender that is one of MSHB's preferred lenders.  

    1Reply
  • Vivek Khoche
    Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes
    9y

    @Mark S. - Congratulations! Not knowing many other details the numbers seems to be too tight.

    Good Luck Investing

    Vivek

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    9y
    Rule 1 of turnkey buying is to not pay cash cause that is how you pay over retail without an appraisal.
    1Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    9y
    Originally posted by @Lane Kawaoka:

    Rule 1 of turnkey buying is to not pay cash cause that is how you pay over retail without an appraisal.

    Lane,

    Even financing is still uncertain.

    Many turnkey companies have very tight relationships with appraisers and lenders so there is all sorts of funky business going on.

    And even if they don't. 

    Most appraisers are a joke anyway as they are more worried about job security rather than providing a genuine opinion on the fare market value.

    They protect their A$$ by using foreclosed properties as comps just to come $10,000(minimum) under.

    We lost a deal (And it was the last finance sale we did) 2 years ago after an appraiser appraised one of our properties at $20,000 under our asking price.

    We disputed and paid out of pocket for 3 independent appraisals (Cost us $2,000) and they all came in at price or higher.

    The lender refused to re-do the appraisal as they have the power to do what they want at their own discretion.

    Bloody joke lol

    Thanks for reading my rant and much success

    Podcast Guest on Show #89
    Oz Realty4.5368 Reviews
    WebsiteView Page
    2Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    9y
    Originally posted by @Douglas Skipworth:

    Hi, @Mark S.

    We are friendly competitors with Mid South so I don't buy from them!

    Doug,

    You're the best in my book mate :)

    Podcast Guest on Show #89
    Oz Realty4.5368 Reviews
    WebsiteView Page
    1Reply
  • Greg GaudetPro Member
    Investor · Pukalani, HI · Member since 2017 · 413 posts · 291 votes
    9y
    Originally posted by @Mark S.:

    @TJ P., as you might expect, there are two sets of numbers: their proforma and my projections.  Obviously, I'd much prefer their numbers, but I think they're overly optimistic.  Here's a rough breakdown:

    The Property Details
    3/2 SFR at $84,000 investor purchase price
    Rental Income: $885/month ($885/$84,000 = 1.05% rule)

    Their proforma numbers indicate an ROI of 29% and monthly cashflow of $407. By default, their proforma numbers don't include them managing the property (not sure why), so take off 10% of gross rents and their proforma cash flow number is $318.50/month.

    My projections have the following assumptions:
    20% down, 30-year fixed, 5.125% interest rate: $365.90/mo debt service
    $43/mo property insurance (actual quote)
    $95/mo property taxes
    8% vacancy loss (or 1 month per year)
    5% ongoing maintenance
    5% cap-ex reserve (since property is fully rehabbed at purchase; if it weren't, I may do 10% here)
    10% property management fee

    My estimated monthly cash flow number with the above assumptions: $133/month. Hopefully it performs better than this, but I feel it's a pretty conservative estimate. When I calculate total return: principal paydown, tax benefit of interest deduction on mortgage, cash flow, (I assume 0% appreciation), I am somewhere in the mid teens in terms of total ROI.

    Thank you so much for the detailed breakdown and for sharing this with us. I'm also considering MSHB and I think my biggest concern is overpaying on the purchase price and losing money if/when I choose to sell. Did your properties appraise, and could you tell me how the appraised value compared to MSHB's "investor's price"? 

    Do you have any concern about this? I'm even a little nervous about getting my money back even if it does appraise, because I've seen so many homes on MLS in Memphis with astronomical days on market; that makes me wonder if you need to price a home below market value in order to move it...

    Mark have you, or anyone else on this thread, sold any of your homes in Memphis and have some light to shine on this?

    Podcast Guest on Show #385
    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    I am concerned about that, but there are too many positives for me not to move forward.  I'm tired of analysis paralysis.  

    3Reply
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