My experience with Memphis Invest (Turnkey Investment)

General Real Estate Investing
8yFollow

My experience with Memphis Invest (Turnkey Investment)

Vlad Bahatyrevich
Philadelphia, PA · Member since 2017 · 7 posts · 13 votes

Hi everyone,

I created this discussion to tell about my experience with Memphis Invest so far. 

I purchased a property with Memphis Invest in September 2017. The only reason I went with MI is because of their strong reputation, even though I wasn’t able to get anything above the 1% rule.

The purchasing process was pretty simple and MI closing team did a great job answering all my questions and getting it all done as quickly as possible, which I really liked. The only downside was that the purchase price of the property was not negotiable, which means you’re not getting a great deal to begin with.

For the first 3 months the property has been performing as expected. I did receive calls from a property manager every month as regular check in's - I did not find these calls necessary as I do not need an update on my property if it's performing well. However, as soon as things went south and my tenant left because “they couldn’t afford it” for some reason (after screening?) things didn’t go so well. I received a call from PM (property manager) informing me the tenant has left two weeks due my mortgage payment. I paid my mortgage out of pocket just recently and the way things go now I am worried I’ll have to pay another mortgage on this house out of pocket this month as well, which hurts a lot! I have a Premier Property Management Insurance (MI’s own insurance plan) which has a Loss of Income coverage in full of 12 mo. However, my PM said it would not apply in my case because property needs to be vacant for at least 60 days. I asked to e-mail me this policy documentation, which I have not yet received. I couldn’t reach out to property management for 4 days so far. My call, voicemail and e-mail were ignored. Will keep you all updated on how things progress from here.

Vlad 

5Reply
245 views

Investor-friendly agents in Memphis, TN

See the agents BiggerPockets members work with in Memphis, TN.

Most Popular Reply

Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
8y

@Vlad Bahatyrevich - I hate that you are having this experience so early on with your first property.  Either way, an early move-out and any feeling of non-responsiveness on our side are both failures to perform at our best.  It is unfortunate, but it does happen and when things are not going smoothly that is where we earn our reputation. 

I know that you spoke with our team a couple of times late today.  I'll let you continue with your update and share whatever you would like to share. As you now know, we will continue to work to get your experience back on track and minimize any lost revenue from this first year.  We will absolutely take the right steps to insure your success.

You have Nate Gray's direct email and phone now and you can always reach out to me if you feel for any reason we are not providing the service you expect when dealing with our company.

All the best to you - Chris

Podcast Guest on Show #224
REI Nation4.476 Reviews
WebsiteView Page
13Reply
See this reply in the discussion

40 Replies

Jump to latestLatest
  • Mujangi Kabamba
    Investor · Midlothian, VA · Member since 2014 · 13 posts · 1 vote
    8y
    Thanks for sharing and please keep BP up to date on the outcome. Wish you happy ending.
    0Reply
  • Derek Lacy
    Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
    8y
    Lol. Your not getting that policy documentation, because that isn’t how it works. There is no covered peril of “he couldn’t afford it.”
    2Reply
  • Henry J.
    Monterey Park, CA · Member since 2014 · 157 posts · 80 votes
    8y
    Vlad Bahatyrevich I do not believe Memphis Invest offers ‘rental insurance’ that if the tenant leaves, they will pay the rent. I think their rental insurance coverage is for the property (your rental house) in case of natural events or accidents (fire or hail damage) that damage your rental house. There are TK companies that offer ‘rent’ insurance/guarantee in case your renter leaves during the lease, but from what I read about MI, they do not believe in rental insurance or guarantee. It’s strange their PM hasn’t contacted you. They are usually pretty good at responding. Unfortunately I’m not a BP colleague with Chris Clothier, but perhaps someone else can ping him to respond. Good luck. Henry
    1Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    8y

    @Vlad Bahatyrevich - I hate that you are having this experience so early on with your first property.  Either way, an early move-out and any feeling of non-responsiveness on our side are both failures to perform at our best.  It is unfortunate, but it does happen and when things are not going smoothly that is where we earn our reputation. 

    I know that you spoke with our team a couple of times late today.  I'll let you continue with your update and share whatever you would like to share. As you now know, we will continue to work to get your experience back on track and minimize any lost revenue from this first year.  We will absolutely take the right steps to insure your success.

    You have Nate Gray's direct email and phone now and you can always reach out to me if you feel for any reason we are not providing the service you expect when dealing with our company.

    All the best to you - Chris

    Podcast Guest on Show #224
    REI Nation4.476 Reviews
    WebsiteView Page
    13Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    8y

    @Henry J. - I appreciate your trying to reach out to me and bring me into the conversation.  I was already aware of the issue, but out of respect for the poster, we always try to make sure we have resolved whatever issues are taking place before responding here on line.  I am down with the flu right now, but Nate Gray, who heads out property management and customer service teams has been in contact all afternoon.

    You are correct as well that we do not advertise any guarantees.  That does not mean that we are not aware when we fail to provide great service and never hesitate to provide assistance.  I sent you colleague request as well, FYI.

    Best,  Chris

    Podcast Guest on Show #224
    REI Nation4.476 Reviews
    WebsiteView Page
    6Reply
  • Vlad Bahatyrevich
    OP
    Philadelphia, PA · Member since 2017 · 7 posts · 13 votes
    8y

    @Chris Clothier - Chris, thank you for this immediate response. I was reached out by Nate Gray yesterday who was able to answer all of my questions and concerns and will keep the property under his radar. 

    I do understand sometimes things go unexpected and vacant property is part of this business. My concern here was the loss of communication in this difficult moment, which as I mentioned, was all figured out now.

    @Henry J. - I appreciate you bringing this topic to Chris's attention. You were right regarding the Loss of Income coverage insurance. Turns out this takes effect only in case of natural events or accidents that damage a rental property by forcing a tenant to move out. 

    Will keep everyone posted as things progress from here.

    Best,

    Vlad

    2Reply
  • Nathan Platter
    Real Estate Agent · Minneapolis, MN · Member since 2016 · 361 posts · 296 votes
    8y

    @Vlad Bahatyrevich , Sorry to hear it's been a rocky start. Almost all property managers have standard Yes/No tenant screening criteria when working with potential tenants (e.g. Income 3x higher than rent, evictions in past 2 years,...)

    In Memphis Invest's defense, I'm 99% certain they have a minimum Income requirement to reduce the likelihood the tenant "can't pay rent"

    I previously worked for a Turnkey provider (MN/WI properties) and the rent guarantee was actually guaranteeing that the property was rentable. Sometimes we'd run specials where the tenant's rent was also guaranteed, but that was rare. Yes, "rent guarantee" is a bad label when referencing a building's renovated condition.

    0Reply
  • Vlad Bahatyrevich
    OP
    Philadelphia, PA · Member since 2017 · 7 posts · 13 votes
    8y

    @Nathan Platter - Thanks Nathan. Unfortunately, it turns out that the tenant was laid off on their job and was forced to move out. I just found out yesterday, but PM didn't mention this before. 

    0Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    8y

    At least the Eagles won

    1Reply
  • P.J. Reilly
    Investor · Denver, CO · Member since 2015 · 31 posts · 17 votes
    8y

    Any updates?

    0Reply
  • Nathan Chase
    Engineer · Vancouver, Canada · Member since 2016 · 21 posts · 6 votes
    7y

    @Vlad Bahatyrevich, How has the last year gone since this hiccup? Did you break even for the year and any lessons learned?

    Out of interest, what sort of vacancy numbers were you using/expecting and how much vacancy did you experience?

    0Reply
  • Vlad Bahatyrevich
    OP
    Philadelphia, PA · Member since 2017 · 7 posts · 13 votes
    7y

    It's been going solid green! 

    Their customer service has been great and caring as well as their PM. 

    For the last 9 months after we had a new tenant in we haven't had any issues really. They had to replace HVAC air handle fan relay, thermostat, bad wires which ended up to be $316.25. The one thing I wasn't expecting is the mortgage increase. (well the mortgage is fixed, but it's the escrow increase of $77/month). It's cash-flowing at $235/mo after mortgage & 10% PM fee. That's $2,820 annually (235*12). I was expecting vacancy of a month or so once per two years. The vacancy I had was about a month and a half, but the MI was super nice in waving the new tenant placement fee due to my rocky start as a new customer. That leaves me with $1,524  ($2,820-$980-$316). If you ask me would I get another rental property with MI? Yes, I would because their team really cares about their company's future and reputation. This is pretty much a white glove service. 

    The property is located in Dallas, TX. 

    @Nathan Chase

    7Reply
  • Michinori Kaneko
    Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
    7y

    @Vlad Bahatyrevich How much was your purchase price/initial cash outlay and whats monthly rent on it? 

    0Reply
  • David Katz
    Member since 2018 · 46 posts · 31 votes
    7y
    Originally posted by @Michinori Kaneko:

    @Vlad Bahatyrevich How much was your purchase price/initial cash outlay and whats monthly rent on it? 

     I'm not OP, but just recently closed on a property with them where the purchase price was $179,900.  They do initial tenant leases of 2 years, so the monthly rent in year 1 is $1,350, and the rent year 2 will be $1,400.  

    1Reply
  • Michinori Kaneko
    Rental Property Investor · NY · Member since 2018 · 571 posts · 332 votes
    7y

    thanks for sharing david.  I assume you use financing 20% or 25% down. interesting to find out how much you will cashflow.

    0Reply
  • David Katz
    Member since 2018 · 46 posts · 31 votes
    7y
    Originally posted by @Michinori Kaneko:

    thanks for sharing david.  I assume you use financing 20% or 25% down. interesting to find out how much you will cashflow.

    Did 25% down.  After mortgage, tax, and insurance, it cashflows about $285 per month.  of course, have to account for maintenance and vacancy, but average length of tenant stay for MI is nearly 5 years (plus I picked a property in a great area that would rent out fast).  And maintenance should be very minimal in first few years because of how extensive the rehab was.  Its the rehab quality and property management that help ensure a safe and steady cashflow.  Of course, its not going to be the crazy high returns you could get with the higher-risk turnkey properties that some companies sell.  But I always prefer to go safer, more conservative, and with the longer-term picture in mind.

    2Reply
  • Vlad Bahatyrevich
    OP
    Philadelphia, PA · Member since 2017 · 7 posts · 13 votes
    7y

    @David Katz 

    @Michinori Kaneko

    The purchase price was close to 160k (purchased in September 2017). Expect a price range depending on the area. Plus, the market in Dallas has been doing well since then. Unfortunately, Memphis Invest doesn't negotiate the price on their properties :(  But their 2-year lease contracts are definitely a great bonus as it helps avoid tenant placement monthly fee for one year. The monthly rent on this property is 1350.00 and it bumps up a bit the 2nd year as David mentioned. I did 20% down with a conventional loan. 

    To David's point, I also went with MI to go safer, hands-free and longer-term in mind.

    0Reply
  • Jon Zhou
    Sacramento, CA · Member since 2017 · 20 posts · 28 votes
    7y

    Thanks for the updates. Will you get another property with MI?

    I've invested in multfamily syndications in the past with 8% returns annually but am looking into turnkey again. Seems like with SFH you need need economy of scale and leverage to get better returns.

    0Reply
  • Jason Lam
    Member since 2019 · 95 posts · 19 votes
    7y

    @Vlad Bahatyrevich

    I’m looking into Memphis invest now for my first rental property. It seems you went through a rough patch but things have recovered. Would you purchase a second home from them?

    0Reply
  • Account Closed
    Member since 2019 · 4 posts · 4 votes
    7y

    @Jason Lam 

    @Jon Zhou

    read @Vlad Bahatyrevich 's post from "5 months ago"  

    He already answered your question.

    1Reply
  • Michelle BarlowPro Member
    Member since 2019 · 42 posts · 10 votes
    6y

    Hi. Just wanted to follow up after 2 years and see if using this Memphis Invest worked out with a decent profit and experience? Also can you sell the property anytime after you buy it?

    Thanks.

    2Reply
  • Michael Glaser
    Contractor · Nashville · Member since 2020 · 8 posts · 2 votes
    6y
    Originally posted by @Michelle Barlow:

    Hi. Just wanted to follow up after 2 years and see if using this Memphis Invest worked out with a decent profit and experience? Also can you sell the property anytime after you buy it?

    Thanks.


    pretty safe bet that it’s working out great - or we’d bring seeing more negative posts. Just my 2 cents!

    0Reply
  • Vlad Bahatyrevich
    OP
    Philadelphia, PA · Member since 2017 · 7 posts · 13 votes
    6y

    @Michelle Barlow Yes, after 2 years MI investment has worked out for me as intended and I would invest with them again in the cities that they cover. Decent profit? No. Cashflow? Yes. The rent is enough to pay off the mortgage and taxes on the property and have some accumulated for repairs. After paying out mortgage, taxes & insurance, the property is bringing $250/mo. So it's really not that substantial considering the out of pocket expenses that are involved when the tenant moves out. Plus, the property would be vacant for a month (at least) to bring a new tenant. Plus, MI asks for a flat 1-mo fee to find and place the tenant. These types of investments are attractive only if you scale them or buy for cash. You can also sell the property anytime after you buy it. 

    @Jason Lam Yes, I would purchase a second home from them in the area they cover. 

    The property brings about a 10% annual return. This is without taking into account mortgage, taxes, insurance, repairs, and appreciation of the house. 

    I know some investors put more than 20% down to bring a higher cashflow. 

    0Reply
  • Michelle BarlowPro Member
    Member since 2019 · 42 posts · 10 votes
    6y

    Thanks so much for the input.  Gave me something to think about.

    Michelle

    0Reply
  • Mike Bucci
    San Francisco, CA · Member since 2017 · 6 posts · 0 votes
    6y
    [Heads up for this group / thread] I am just completing 2 years on a property bought under the Memphis Invest program.  It has not gone well.  They make a lot of big promises up front, and to be fair they are a group of nice people who I do believe try to serve the investors best interests, but it does not always turn out that way.  They claim an amazing track record of finding quality tenants and almost no evictions - well I must be one of their 'few exceptions'.  In the 2-year lease the tenant only paid the full amount on time a handful of times.  In fact they didn't even pay at all on the very first month! Maybe I had a rare bad experience as it seems @Vlad Bahatyrevich would recommend MI (now REI Nation) even after the rocky start. My investment started out rocky and ended up with me holding the bag at the end of the lease with the tenant 2 months behind...



    Originally posted by @Vlad Bahatyrevich:

    @Michelle Barlow Yes, after 2 years MI investment has worked out for me as intended and I would invest with them again in the cities that they cover. Decent profit? No. Cashflow? Yes. The rent is enough to pay off the mortgage and taxes on the property and have some accumulated for repairs. After paying out mortgage, taxes & insurance, the property is bringing $250/mo. So it's really not that substantial considering the out of pocket expenses that are involved when the tenant moves out. Plus, the property would be vacant for a month (at least) to bring a new tenant. Plus, MI asks for a flat 1-mo fee to find and place the tenant. These types of investments are attractive only if you scale them or buy for cash. You can also sell the property anytime after you buy it. 

    @Jason Lam Yes, I would purchase a second home from them in the area they cover. 

    The property brings about a 10% annual return. This is without taking into account mortgage, taxes, insurance, repairs, and appreciation of the house. 

    I know some investors put more than 20% down to bring a higher cashflow. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free