Menphis, Orlando, Chicago or Alabama for buy and hold rentals?

21 Replies

Hi

I am ready to start investing out of state in buy and hold through turn key providers. Provided that I find a good team in all those markets, which market do you recommend better in terms of appreciation and cashflow? I am afraid that Memphis may be over saturated with rentals since there has been so many investors there over the past 10 years. So I am also considering Huntsville, Nashville, Orlando, Chicago and Cincinati. Any thoughts on how are those markets today? Thanks so much.

Good to know. I can help you in Orlando and Chicago. What exactly are you looking for?

its just as important to choose the right team as the location.

Renters Warehouse has done a great job for us in Nashville, and it's certainly a hot market right now.

@Silvia Ladero Memphis is still one the best if not the best cash flow market today. It all depends on what you are looking for. If you want cash flow, Memphis is your market. If you want appreciation, Nashville is your market. If you give me some parameters I can send you over some "Cash Cow" properties we have in our current inventory. With that being said we currently have the largest inventory in the Mid-South and manage 1500+ properties.

@Silvia Ladero

Over Saturated?? Not a chance! I manage Hedge Funds and Local Investors in Memphis and we are finding excellent deals that see returns in the Mid-Teens on an annual basis. 

Make sure you can trust your source for properties is my advice! I am happy to answer any questions you might have about Memphis. Call anytime!

Good Luck!

I can help you here in Birmingham. It's an amazing market here.

@Kyle Davenport -- interested in this. im in nashville. looking for 2%+ single units

would love to see your list

@Kyle Davenport I'm a US citizen currently living abroad. Would like to know more investing in Tennessee. 

@Sean Kelly I will send you over some properties that fit your numbers.

@June Mung Great connecting with you! I look forward to helping you on your journey to investing in TN.

Sure. I pretty much only work with turnkeys so can give some market insight. 

Hunstville, Nashville, and Orlando have not had positive cash flow situations to make them conducive to having turnkey operations there. I think Orlando had some back in the day but they are long gone from what I understand. Hunts and Nash never had them. Closest to those is Birmingham (good market but I don't know of the good providers there) and Memphis (good providers but I don't like the market...partially for exactly why you said). Cincy may work for numbers but I have no idea of any turnkey providers there. Chicago is definitely a viable option. I've been working with people buying there successfully for years. 

Reach out anytime if I can be of anymore help!

Originally posted by @Michael Logan :

Renters Warehouse has done a great job for us in Nashville, and it's certainly a hot market right now.

 Hi

Are you able to get good cash flow from SFH in Nashville?

Originally posted by @Account Closed :

Good to know. I can help you in Orlando and Chicago. What exactly are you looking for?

 Single family homes in good neighbourhoods, B or better, good schools. For Chicago outside of the city limits to avoid the big property tax increase that is coming. 

Originally posted by @Silvia Ladero :

Hi

I am ready to start investing out of state in buy and hold through turn key providers. Provided that I find a good team in all those markets, which market do you recommend better in terms of appreciation and cashflow? I am afraid that Memphis may be over saturated with rentals since there has been so many investors there over the past 10 years. So I am also considering Huntsville, Nashville, Orlando, Chicago and Cincinati. Any thoughts on how are those markets today? Thanks so much.

Hello,

Welcome! Your fear can be justified. I have heard there are a lot of investors in Memphis. Sometimes it is good to branch out to a different market. Make sure you do your research on turnkey providers. You want to make sure they are REAL providers, and not just people who do listing searches. 

Feel free to send me a message with any questions. I'd be happy to assist! 

@Silvia Ladero Welcome to BP! I'll toss in another vote for Birmingham, as there are plenty of great cashflow properties in B/B+ areas with great ROI. Bham also has a cost of living below the national average, above national average jobs growth and AL has some of the lowest property taxes in the nation. Whether you go turnkey or self-management, Birmingham is a great place to live and our rental market is strong.

I will also second (or third) @Jay Hinrichs that the team you choose is just as important - I think more so -  than your market. You can get into a hot market with amazing demand and still have a disaster on your hands if you have the wrong provider on your team. Similarly, secondary markets still provide a ton of opportunity if you have a provider that knows the market, has the network and connections to find the good deals and keep costs low, and has enough skin in the game to be working for you long after you cut a check. I always advocate looking for a team you trust and who will give you upfront data-based answers above all else - and then go visit them to make sure the product and the people live up to that representation. 

Which also leads me to second @Tom Ott - turnkey can be a great vehicle, but there are definitely less scrupulous salespeople out there posing as providers that really just search listings and then expect a middle-man cut of the sale without having any long-term skin in the game. Vetting your providers - no matter the market -  should be top priority.

If you have any questions about Birmingham, I'm happy to help. 

Best of luck!

Clayton

@Silvia Ladero Our SFM in Goodlettsville (15-20 minutes north of Nashville) cash flows about $220 per month after all expenses (PITI, 13% prop. mgmt, 7% maintenance, 7% capex, 8% vacancy). 7% capex may be a little high since we have a new roof and central unit. The house is fully leveraged since we did a cash out refinance before we moved out of it last year. It rented for $2000 last year, and we'll likely raise the rent this year. It appraised for $212000 in Nov/2015.

I want to give you this info in case you use Renters Warehouse:  the property mgmt is only 13% if we have to place a new tenant every year.  I know that's high, but they're very professional, plus we added eviction protection for $15/month.  Renters Warehouse does not charge a set %.  They charge one month's rent for tenant placement, and then $75 per month for prop mgmt.  We actually just got very lucky:  our tenants got transferred to a different state before their lease was up.  So we're doing a "tenant exchange" where they keep paying the rent until we find another tenant, and they will be paying our tenant placement fee of $2000.  Also, we have 0% vacancy!    

Michael, that sounds really good, I'm definitely keeping an eye opened on Nashville, thanks so much for the information

I have changed my focus to multi family, but I still have a SFR in Birmingham (Midfield) that I am looking to sell. It rents for $750 and has 11-months left on the current lease. I would like to sell it directly to an investor and avoid the middleman markup. Drop me a PM if you know of anyone who would be interested in a solid,cash flowing SFR.

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