MEMPHIS MEMPHIS MEMPHIS

Buying & Selling Real Estate
5yFollow

MEMPHIS MEMPHIS MEMPHIS

Brendan Lawrence
Rental Property Investor · Bend, OR · Member since 2020 · 33 posts · 18 votes

hey guys!

I read the great book, "Who Not How", recently, and in respect to the wisdom of the book I'm landing right here to ask this question!

Memphis, TN, seems very appealing for a remote rental investment territory.  I've noticed MANY neighborhoods where houses can be bought sub-$20k. But, a quick drive down the google street view and it looks like everybody is either working from the sidewalk or inspecting the patios for signs of rot.  Obviously this turns around any thoughts of considering these regions, but I do notice that there are a handful of zones where you can spend maybe around $40k or $50k and the next street over is starting to find 6 digit homes being listed.

My question here is what would you say the best neighborhoods are, for a BRRRR investor? I have about $10-15k to put down on a property of my own, and another $10k from a partner. I'll be holding mine as a rental but flipping the house with the partner for an equity split. It doesn't have to be IN Memphis either, mostly just commuting distance.

Do any of you guys/gals have property management and/or realtors that you recommend?  I'll absolutely give them a call and if you like I can drop your name as well as the reference.  

Thank you for any info and hope your 2021's are off to a good start!


3Reply
95 views

Most Popular Reply

Keleisha Carter
Investor · Tampa · Member since 2018 · 289 posts · 107 votes
5y

Hi Brendan, I have been studying the Memphis market since May 2020 and what I've learnt is that each zip code vary street by street. I've also listened to Crest Core podcast, they have 2 episodes talking about the zip codes and giving an overview of each.

@Kenneth Williams I just met and he can share with you a zip code guide. I started using that to compare with the guide that I have. I can share with you as well.

Another thing I would suggest, (I'm finally understanding the benefit of this now) make realtor, Redfin and trulia your best friend. Just go on the MLS, type in Memphis and view properties to see what they are being listed for. Redfin has an option where you can filter your search for properties last sold so you can do a comparison. Then, start analyzing them using the BRRRR calculator. It doesn't matter if your numbers aren't correct right now, but try to understand which numbers affect what so you know how to make adjustments. For rent, use rentometer and if you finish your free trial, use zillow.

You can also reach out to @Stephen Akindona he has been super helpful. He has a team and can manage your renovations as well.

Shoot me a private message if you have any questions. Rookies helping each other out.

10Reply
See this reply in the discussion

30 Replies

Jump to latestLatest
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    You want to learn about classes of neighborhoods.

    Those sub-$20 houses are D-class and you want to avoid them like the plague. If you are a long-distance investor, you're unlikely to find a property manager to handle them for you. These homes can make good money but they are very hands-on, will have a lot more turnover, more evictions, more damages. I recommend you read "Evicted" by Matthew Desmond to get an idea of what it's like to invest in a D-class neighorhood. 

    C-class can be tricky. Good cash flow but it still requires more work and will have more issues. I manage and own some of these and the cash flow is nice, but the definitely take more of my time and effort.

    B-class is your sweet spot. Blue-collar workers with families that tend to stick around for a while.

    A-class may be your best for appreciation and with fewer problems but it's more expensive to get into the market, won't cash flow as well, and may sit vacant longer while you wait for the white-collar worker to come along.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    9Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    your heading for financial suicide thinking of 20 to 40k remote flips in the midwest.  
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Brendan Lawrence
    OP
    Rental Property Investor · Bend, OR · Member since 2020 · 33 posts · 18 votes
    5y

    Nathan thank you for that!  And I'm going to download that book right now and give it a listen that's great advice!

    And Jay thanks for you input as well, can you elaborate for me?  Have you had experience or seen others do this?  

    0Reply
  • Keleisha Carter
    Investor · Tampa · Member since 2018 · 289 posts · 107 votes
    5y

    Hi Brendan, I have been studying the Memphis market since May 2020 and what I've learnt is that each zip code vary street by street. I've also listened to Crest Core podcast, they have 2 episodes talking about the zip codes and giving an overview of each.

    @Kenneth Williams I just met and he can share with you a zip code guide. I started using that to compare with the guide that I have. I can share with you as well.

    Another thing I would suggest, (I'm finally understanding the benefit of this now) make realtor, Redfin and trulia your best friend. Just go on the MLS, type in Memphis and view properties to see what they are being listed for. Redfin has an option where you can filter your search for properties last sold so you can do a comparison. Then, start analyzing them using the BRRRR calculator. It doesn't matter if your numbers aren't correct right now, but try to understand which numbers affect what so you know how to make adjustments. For rent, use rentometer and if you finish your free trial, use zillow.

    You can also reach out to @Stephen Akindona he has been super helpful. He has a team and can manage your renovations as well.

    Shoot me a private message if you have any questions. Rookies helping each other out.

    10Reply
  • De Rasche
    Real Estate Agent · Near Memphis, Tenn. · Member since 2019 · 88 posts · 34 votes
    5y

    You have received great advice above. 

    I am in the area and have worked all over Memphis.

    If you send me the number and street, I may be able to give you input.  Some streets here change by the block as to issues.

    0Reply
  • Hassan Mahmood
    Atlanta, GA · Member since 2014 · 9 posts · 4 votes
    5y

    Hi @Nathan Gesner, what neighborhoods/zip codes do you recommend for A & B-Class properties in Memphis? What price point would they be in? And do you have any brokers you recommend speaking to? Thanks

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    I'm not familiar enough with Memphis to make recommendations. I just know you have to be careful because you get what you pay for down there. You need someone that really knows the market and very specific communities. Have you read Long Distance Real Estate Investing by David Greene? He has good advice about finding the right experts.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    1Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    5y
    Originally posted by @Hassan Mahmood:

    Hi @Nathan Gesner, what neighborhoods/zip codes do you recommend for A & B-Class properties in Memphis? What price point would they be in? And do you have any brokers you recommend speaking to? Thanks

    Hi Hassan, I see you are making your first posts in a while on here.  Welcome to the conversation and best of luck as you get going here.

    I am pointing these comments not just to you, but to everyone reading this.  @Brendanan Lawrence If you want to have long-term success buying from out of state, you have to stop using the A,B,C class discussions about houses and neighborhoods. Investors run the very real risk of getting burned badly when they use these very rudimentary classifications.  The reason being - a seller will tell you whatever you want to hear about a neighborhood to give you confidence that it is higher up the classifications than it really is.  

    Investors have to pay attention to the median home value, the median income and the median rent although that last number is the hardest to get good quality data on.  The arbitrary ways of describing a neighborhood create false senses of security for out-of-state investors and make it much easier for sellers to over come buyers obstacles.  Buyers really need to be better educated.  If you are buying homes in the bottom 10-20% of value in a city and expecting to have a positive experience- especially from a distance, in most scenarios investors are going to be disappointed.  

    Memphis is absolutely a city where out of state investors lose money and get taken advantage of - especially at lower price points - every single week.  There are some very good people who work with out of state buyers and try to help them, but many buyers have poor expectations from the beginning.  Too often, investors think a property in the bottom 10-20% of value is a "C" area because someone they connected with told them that was case. The reality is, these price points are often avoided by many local investors because of the crazy amount of risk and the high level of work that has to be done to make these successful.  I personally know several investors who do great at the lowest price points in Memphis, but they live here and are in these neighborhoods and by their houses daily if not weekly.  It takes hard work and is often very hands on.  It is tough for a management company to offer this kind of service to a passive, out of state investor.  Do your due diligence and dig deep on these super low prices and go in with your eyes wide open.

    Podcast Guest on Show #224
    REI Nation4.574 Reviews
    WebsiteView Page
    4Reply
  • Aigo Pyles
    Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
    5y

    We do it street by street in Memphis. 

    1Reply
  • Dean HarrisBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Brendan Lawrence

    I completed 7 BRRRR's last year in Memphis. There is a ton of opportunity for it without have to pay Turnkey prices. happy to connect and answer any questions you may have based on my personal experiences.

    CrestCore Realty4.713 Reviews
    View Page
    10Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    I am an out of state investor and worked with Roofstock to purchase in the 38109 zip code. See below for the numbers. Roofstock had this property listed as a 2 star neighborhood and the tenant was paying on time and it has the best rent in the area from what I checked. Let me know if you want to connect and chat about this. 

    Purchase Price: 70k 

    Rent: $850/month 

    Property Management: Renshaw Property Management 

    3Reply
  • Lars Hasseler
    Member since 2018 · 24 posts · 13 votes
    5y

    @Aj Parikh I got smoked on a few Roofstock "deals". In Memphis, I've done great. In other cities, Roofstock's estimates were wildly off on repairs. That's a small data set (11 SFRs), but I would be wary of trusting Roofstock inspections and estimates. Have a big cash reserve ready.

    0Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    @Lars Hasseler I agree, its still early for me to tell everyone that its the best investment I have made with Roofstock but the property has been performing well so far. The estimates on the inspection report that I saw were also under $500 so nothing major and I am happy with the returns. 

    0Reply
  • Cj Powderhorn
    Investor · UT · Member since 2020 · 84 posts · 91 votes
    5y

    @Brendan Lawrence  I have really been lucky investing in Memphis. I think it's due 100% to my team there.  I have 10 properties and they have all done well over the last 11 years. I've had several tenants stay (and still staying) for 10 years. I think Dean and others in the area do a great job of providing resources, etc. I'm also happy to connect with you as just another Memphis investor...

    8Reply
  • Sakib J.
    Investor · Los Angeles, CA · Member since 2020 · 154 posts · 32 votes
    5y

    @Aj Parikh

    Good luck with Renshaw. Be very very careful.

    1Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    @Sakib J. Thanks for the heads up. Will do. 

    0Reply
  • S Alessandra
    Investor · San Diego, CA · Member since 2019 · 5 posts · 0 votes
    5y

    @Lars Hasseler 

    @Aj Parikh   

    I’ve used Roofstock with some success in Chicago to add a couple properties to my portfolio mostly because I already have a good team in place there. In Chicago I only buy brick and greystone, is it also better to buy the brick homes in Memphis? I’m still trying to figure things out there. I hear you guys say it’s block by block and that reminds me so much of Chicago as well… 

    Alessandra 

    0Reply
  • S Alessandra
    Investor · San Diego, CA · Member since 2019 · 5 posts · 0 votes
    5y

    @Cj Powderhorn it’s nice to see other women with sizable investments! How are you sourcing your Memphis holdings? 

    0Reply
  • Sarah Woods
    Member since 2022 · 1 post · 0 votes
    4y
    Quote from @Brendan Lawrence:

    hey guys!

    I read the great book, "Who Not How", recently, and in respect to the wisdom of the book I'm landing right here to ask this question!

    Memphis, TN, seems very appealing for a remote rental investment territory.  I've noticed MANY neighborhoods where houses can be bought sub-$20k. But, a quick drive down the google street view and it looks like everybody is either working from the sidewalk or inspecting the patios for signs of rot.  Obviously this turns around any thoughts of considering these regions, but I do notice that there are a handful of zones where you can spend maybe around $40k or $50k and the next street over is starting to find 6 digit homes being listed.

    My question here is what would you say the best neighborhoods are, for a BRRRR investor? I have about $10-15k to put down on a property of my own, and another $10k from a partner. I'll be holding mine as a rental but flipping the house with the partner for an equity split. It doesn't have to be IN Memphis either, mostly just commuting distance.

    Do any of you guys/gals have property management and/or realtors that you recommend?  I'll absolutely give them a call and if you like I can drop your name as well as the reference.  

    As a local, I would strongly discourage buying anything that’s selling for $20k in Memphis. This market is complex and very difficult to manage remotely unless you have great team you trust. I’m new to all of this (I only have two properties) but Memphis has the craziest neighborhoods. You cross one street or go two blocks in one direction and the ambiance changes dramatically. Best of luck though! 
    0Reply
  • Vanessa R Pounds
    Member since 2022 · 2 posts · 2 votes
    4y
    Quote from @Cj Powderhorn:

    @Brendan Lawrence  I have really been lucky investing in Memphis. I think it's due 100% to my team there.  I have 10 properties and they have all done well over the last 11 years. I've had several tenants stay (and still staying) for 10 years. I think Dean and others in the area do a great job of providing resources, etc. I'm also happy to connect with you as just another Memphis investor...


     You are my kind.  I am looking t break into the Memphis market and I'm looking for those kinds of tenants.  Everyone needs affordable housing and I want to buy the block. I'm ready to make some moves. 

    1Reply
  • Joe Vissichelli
    Member since 2022 · 2 posts · 4 votes
    4y

    I have been looking in Memphis for sometime for my first SFR in Memphis. This is my first rental property outside of my own back yard.
    The property I am interested in resides in 38112 near the golf course. Rentals for a 3-1 in that area can be near $1000. It is fully rehabbed and 1000 sqft.  I am currently working with Advantage Property Management. 
    Does anyone have any thoughts on this area? 

    2Reply
  • William Haynes
    Real Estate Agent · Memphis · Member since 2021 · 16 posts · 10 votes
    4y

    Memphis is incredibly highly localized, which can be a real double edged sword. It's very easy to askew number to misrepresent values. Even in the highly desirable areas (think Midtown, 38104) there are abundant fringe areas with varying values. Money can be made in any class of area here, depending on your strategy and goals. Typically speaking currently if you find something for 20k, it likely is too beat up to be very profitable. A year ago if there wasn't at least a 20k spread on it no one really took it seriously or bought it. However, even though the market is starting to soften a bit now, local investors, turnkey companies and flippers have started accepting smaller in smaller margins. If you find something cheap, do your homework and connect with a local expert.... you often get what you pay for. 

    3Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    4y
    Quote from @Sakib J.:

    @Aj Parikh

    Good luck with Renshaw. Be very very careful.

    Why do you say that?  You can PM me if you’d rather not say publicly.  Interested to hear your experience.

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    4y
    Quote from @Aj Parikh:

    @Sakib J. Thanks for the heads up. Will do. 


     AJ, how’s your experience w Renshaw been?  Feel free to PM me if you’d rather not say publicly. 

    0Reply
  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 887 votes
    4y

    I'm based in Memphis and have a portfolio of rentals (see my BP profile) and I'm happy to help if you need contractors or contacts I'll introduce you to whoever you need. 

    2Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free