Memphis neighborhood insights

8 Replies

Folks - anyone could provide me with insights into Memphis neighborhood near Stax museum - especially around east of 69 and Walker Ave. Tried to ask a few folks but got some mixed responses .

Lower income area. Don’t know if anyone doing anything over in that area. 

@Vikas Raoot ,

As I'm sure you know, Stax has a significant investment in that area and so does LeMoyne-Owen College.  Over two years ago, Tom Shadyac purchased a defunct commercial development called Town Center.  Thankfully, they've recently announced plans to move for on repositioning that property (article).  I also know a philanthropic landlord in the area who has some multifamily properties.

From what I understand, all of those stakeholders above are looking at more than economics, which says a lot about the opportunities in the area.  However, it also says a lot about how determined people are to make a difference since they are literally investing millions of dollars right there.

Best of luck to you!

I have a SF rental 3/4 of a mile east of Stax, low income area but it works for my program. Personally if your new to investing in Memphis I would probably shy away till you have a team that wants to deal with the issues that just come with this type of investing. It takes the right relationship with the right manager to deal with things in the C-D areas

Thanks folks for chiming in.. I guess I would probably need to start talking to a lot of locals now to get a feel and build relationships over in that area in general to understand this better. What I am looking to figure out is how does all this translate to vacancy rates, delayed rents, problem tenants etc.. But thanks so far for all your inputs ! Will keep monitoring this thread...

@Vikas Raoot @Douglas Skipworth

For what it's worth after a few years of investing in these areas all of the misc repairs, turn over costs, vacancies, evictions, FED's, cap ex, taxes, property management and all the other misc crap will be 50% of gross rent. I keep accurate records and over 4 1/2 years in these areas of Memphis it is within 5%  of half of the gross year after year. For quick evaluation I just figure if I can't get my investment back quick enough / or pay a mortgage and have cash flow  with 1/2 the rent I pass on the deal. 

@Vikas Raoot - You have been doing right thing by investing in your back yard. After few years you will realize that few problem child you can't handle. With OOS there is no way you can win in the current market. For general REI education I like following links:

https://www.apartmentlist.com/rentonomics/rental-i...

https://www.bloomberg.com/news/articles/2017-10-26...

https://www.biggerpockets.com/forums/311/topics/22...

https://www.biggerpockets.com/forums/52/topics/402...

https://www.biggerpockets.com/forums/594/topics/49...

Good Luck

Vivek

@Dean H. - I base my analysis on the same 50% expense budget. If the deal doesn’t cashflow enough with that, it’s a no deal.

@Vivek Khoche : thanks for those links- will read thru. Could you elaborate on what exactly about the current market conditions makes OOS investing a damper according to you?

@Vikas Raoot

That area has promise! With all of the investing going on in that immediate area, I see it as an opportunity to catch a community on the rise. Has @Douglas Skipworth mentioned, its more than just economics in that immediate area and that should be all you need to know about the potential for opportunity. 

Best of Luck to you!

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