Investor · San Jose, CA · Member since 2024 · 20 posts · 5 votes
Hi,
I am looking for some advice on a turnkey investment in Memphis, TN 38118 zip code area. The property was sold for 70k two months ago and the Turnkey company did approx 40k renovations on it and selling it for 140k-150k now.
I can see the numbers are showing positive cashflow if the property goes on rent. The area shows high rental estimate on the bigger pockets rental estimate tool. Is there anyone here who has invested in this area and could share some more insights about turnkey investment in this area?
Investor · Madison, AL · Member since 2020 · 40 posts · 26 votes
2y
I bought a turnkey rental in zip code 38127 (C class) area 3 years ago. So far I have been happy with the results. I used Memphis Investment Properties.
Investor · Madison, AL · Member since 2020 · 40 posts · 26 votes
2y
I bought a turnkey rental in zip code 38127 (C class) area 3 years ago. So far I have been happy with the results. I used Memphis Investment Properties.
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
2y
It is good to know the area, but I think you are focusing on the wrong thing if that is your primary focus. How does the condition of the house and its features relate to the area?
Your post really only says someone bought a property for $70. They say they invested $40 and are now asking for a significant premium over their investment. What did they do and is it worth it? Have you seen it? Check the value with comps. Don't blindly rely on the seller's numbers, just in case you are.
Lender · Nationwide · Member since 2023 · 362 posts · 237 votes
2y
Hey Abhishek, we've spoken in the past. I've purchased to turnkey properties in Memphis. Happy to talk again and share my thoughts on turnkey in Memphis. Overall, if you aren't meeting the 1% rule, I wouldn't do it, but, of course, there are exceptions to the rule.
I bought a turnkey rental in zip code 38127 (C class) area 3 years ago. So far I have been happy with the results. I used Memphis Investment Properties.
It is good to know the area, but I think you are focusing on the wrong thing if that is your primary focus. How does the condition of the house and its features relate to the area?
Your post really only says someone bought a property for $70. They say they invested $40 and are now asking for a significant premium over their investment. What did they do and is it worth it? Have you seen it? Check the value with comps. Don't blindly rely on the seller's numbers, just in case you are.
Built in 1964, this 1,040 sq. ft. home features three bedrooms, one bathroom, and sits on a 0.21-acre lot.
The property required extensive interior and exterior renovations to reach rent-ready condition. Interior work included refinishing hardwood floors, painting, laying new tile, and installing new light fixtures. Exterior work involved repairing the roof, painting, replacing rotten wood, and installing new light fixtures.
Multiple contractors were engaged for the project, with licensed professionals handling electrical, plumbing, and HVAC upgrades.
I have compared the comps in this area on Zillow and it’s in the range of 115k to 130k.
all else checks out, except that I do not have boots on the ground to verify in-person.
Hey Abhishek, we've spoken in the past. I've purchased to turnkey properties in Memphis. Happy to talk again and share my thoughts on turnkey in Memphis. Overall, if you aren't meeting the 1% rule, I wouldn't do it, but, of course, there are exceptions to the rule.
It’s hard to find 1% deals anywhere in current market conditions. This one is close to 0.7%
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
2y
@Abhishek Agarwal It's the boots on the ground observation that I am referring to. The write-up from the listing will always be favorable to the seller. I've seen quite a few properties described beautifully with very nice pictures. Upon personal inspection, I often find terrible workmanship.
For example, I saw a "newly renovated" property advertising it had central air. There was a new thermostat and old unit. The seller said the central air worked when it wouldn't come on for me in my walkthrough. The new thermostat was a heat-only thermostat, so c/a couldn't possibly work at least with that thermostat. The seller then said he would call his uncle who did the work all the time to fix it. His uncle is the one who installed the wrong kind of thermostat and somehow verified the c/a worked! There were a lot of obvious misses in that house that you couldn't see in pictures and of course the seller didn't write they were incompetent renovators.
I highly recommend getting someone on your side to eyeball the property before you buy it. You may be able to hire a local home inspector, for example. The example above is a very minor cost. Pictures and listing text won't show you a failing roof, soil pipe, wet basement that is currently dry, etc.
Hey Abhishek, we've spoken in the past. I've purchased to turnkey properties in Memphis. Happy to talk again and share my thoughts on turnkey in Memphis. Overall, if you aren't meeting the 1% rule, I wouldn't do it, but, of course, there are exceptions to the rule.
It’s hard to find 1% deals anywhere in current market conditions. This one is close to 0.7%
In Memphis it’s becoming increasingly difficult. This is why I’m shopping more in the Detroit market now.