Desperate for Tenants in Memphis

General Landlording & Rental Properties
11yFollow

Desperate for Tenants in Memphis

Bill Manassero
Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes

Bought a duplex in Memphis with two 3bd/1ba units, nicely rehabbed, from a turn-key "passive" investment firm. The units are going for $650 each and the market is around $750. I have not had a tenant in either unit since purchase (over 6 months ago). I am in the process of trying to find a third property management firm. I am desperate here and not quite sure what to do. Reduced price to $595 per unit but still no tenants. Any suggestions.

0Reply
496 views

Most Popular Reply

Derrick Craig
Memphis, TN · Member since 2013 · 969 posts · 524 votes
11y

@Bill Manassero 

Here is an update for you and the BP family on the duplex/townhome that you have here in Memphis. I know you were having such a hard time with the last PM and a lot of naysayers were giving you a hard time and or telling you to cut your losses....

 GREAT NEWS-  :))))))))

I rented  3420 Bruntonwood Cove to a mother of 4, a Section 8 tenant for $797.00 she has moved to Memphis from Connecticut to be closer to her family. One down one to go hopefully I will have the other side rented for you before the end of the month... Keep your head up everything is going to be just fine as @Melodee Lucido would say!! LOL!!

14Reply
See this reply in the discussion

95 Replies

Jump to latestLatest
  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    11y

    I don't know the area like the others who have commented, but my experience with a bad property leads me to think that you should sell it now, as soon as possible.  Sounds like it's in good shape right now since the previous owner rehabbed it.  It's probable that it will never be in this good of condition again - ever.

    1Reply
  • Julia Blythe
    Real Estate Investor · Memphis, TN · Member since 2014 · 156 posts · 101 votes
    11y

    @Bill Manassero,

    @Brandon Kamm  and @Dean Letfus are exactly right.  I wouldn't be content to get these units rented and then sit on them for cash flow.  I would be looking at the best exit strategy as possible.  Honestly, you have no chance of getting these rented without Section 8, so get on that immediately.  Although it was stated that many people on Section 8 demand nicer units, there are a huge percentage of people that want and need to live in a certain area (lack of transportation, other family members, etc).  

    I would try to get the units rented and then immediately put it up for sale as fully leased.  Perhaps you could contact the property management companies of some of the surrounding apartments and see if they are interested in getting the units leased.  They are already in the neighborhood, so they know the market.  

    I'm a "glass is halfway full person" and think you can pull yourself up by your bootstraps and get this thing leased and then sold. It won't be easy but you need to minimize the bleeding.  I have definitely learned more from my loses than I have from any of my wins.

    You can do it .... just don't stay stuck in the allusion that you can sit on it and it will change.

    2Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    OK.  Does anyone know a good Memphis realtor that can get me top dollar for the property?  No wholesalers please.

    0Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    What options do I have?  Lease Option?  Rent to own?

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    11y

    bill , the only way you could get top dollar for the place would be to find someone who sells to out of state investors but none of the companies like ours that I know of sell homes like this.  There is no special realtor, any realtor would do just fine as it will come down to your price.  You might have a hard time finding a realtor to take on the listing. 

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    0Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Bill Manassero:

    OK.  Does anyone know a good Memphis realtor that can get me top dollar for the property?  No wholesalers please.

     I'd go with whatever agent sold you the property, that agent managed to get top dollar (or more) for it last time.

    2Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Bill Manassero:

    What options do I have?  Lease Option?  Rent to own?

    I wouldn't do lease option or rent to own because that will not get rid of this headache for you. It will keep coming back.  If you don't think it's something that's going to work out for you long term find another buyer and move on.  

    My first purchase when I branched out from B neighborhoods into low income rentals turned out to be in a rougher area than I had bargained for. I made the mistake of not checking the property out in the evening or a weekend and instead both of my visits were in the morning when trouble is usually sleeping or hungover. It turned out that the small apartment building across the street was a drug supermarket with every unit selling drugs and the entire street turned into an area that no respectable tenant would want to be anywhere near come late afternoon.

    My options were either rent to a drug dealer/crack head and continue to deal with this headache or get out of the property for whatever I could get for it. I sold it and took a small loss mostly due to commissions and closing costs,. I purchased the property at a very good price so I didn't take a big hit. The next owner ended up selling the property again for a bigger loss than the one I took and I'm sure the current owner probably also regrets buying it. I for one am glad it's gone and it was a lesson learned and I've moved on with my life. I still buy in low income areas when the deal is right but I've gotten a lot better at it.

    2Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    11y

    You could try and see if Rebecca can re sell it. That is your ONLY way of not losing your shirt. You could also try the rehabber Charles. He is a good guy and may be able to move it for you. But unfortunately that area has gotten very bad very quickly so it will be a big headache for anybody to sell.

    0Reply
  • Jeremy T.
    Investor · Pittsburgh, PA · Member since 2014 · 266 posts · 240 votes
    11y

    My apologies to @Bill Manassero that's a tough spot.

    I know this is hindsight, and I hate being 'that guy', but this thread could be a Sticky for the importance of doing due diligence before piling your (presumably) hard-earned money into something you clearly had little knowledge about.  The questions you are asking of Memphis BP members are inquiries that need to be executed prior to placing a penny into a property. 

    Hell, there is this burgeoning website, census.gov, which provides essentially any element of demographic data one could ever imagine down to census tract block groups (which, in cities, is a very small, concentrated area).  If data collected, analyzed and distributed by the government is not your thing, Trulia has a number of 'heat maps' that can provide a less-detailed, but more up-to-date (presumably) assessment of an area/region/zip. 

    If any of you have traded equities/futures/etc with any success you know that THE key to longevity is 'cutting your losses'. Granted, in REI, liquidity is your biggest enemy as it relates to getting out from under this one. As such, (and I hate to be the bearer of bad news) you will likely have to wholesale to get rid of it with any sort of expediency.

    Again, my apologies Bill.  Get the hell out of there, learn from it, and move on to the next one.

    1Reply
  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    11y

    I got rid of my bad multies by taking them to absolute auction.  It rained all day, and few people showed up - even less made a bid.  I lost my butt, but I'm glad to have that long chapter of a night-mare behind me.  My advice - go ahead and dump this thing and take your loss.  Even if you lose 1/2 of your investment, you can re-make that money back in a year or two.

    1Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    Bryan, sounds like a plan.  But who's going to coach me to make it back in a year or two?  Any takers?

    0Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    We could make this a case study and post the results on BP.

    0Reply
  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    11y

    @Bill Manassero I take coaching from Lifeonaire (www.lifeonaire.com).  My coaches there have helped guide me through a similar situation (that I posted about earlier).  What I did was to refinance my other properties and pulled out equity to pay off the property that was eating my lunch (you've already got yours paid off, so you are ahead of the game).  And I sold at a very large sized loss.  Didn't have to come out of pocket for all of it since most of it came from the refi, but it still hurt.  And this afternoon, I will be closing on another property of mine that I am selling and will use the proceeds to pay off the rest of my credit card debt that I took on to sell the bad property.

    What you have going on right now is more than just a bad property that is costing you money.  It is also costing you time - and more importantly, it is costing you mental and emotional energy.  That's one thing that the guys at Lifeonaire focus on - living Life to the fullest, putting Life ahead of money.  And looking at money in a better prospective.  It's helped me a lot.  Once you have this thing sold and out of your mind, then keep it out of your mind expect for the lessons learned.  Don't dwell on it, and use your new-found mental and emotional freedom to re-make that money (and more).

    Disclaimer :  I am also set up as an affiliate with Lifeonaire so that I can earn commissions on selling their coaching products.  But I am also a paying student of theirs.  I believe in what they are doing.  Please don't let my commission affiliation sway your thoughts about them.  Do date, I have made very little commission from them and really don't need that money.  I would be happy for you to come join us at Lifeonaire whether I make a commission or not.

    1Reply
  • Melodee Lucido
    Real Estate Investor · OR · Member since 2012 · 390 posts · 133 votes
    11y

    Bill,

    You have received lots of advice (as well as a bit of a whipping) here. As I see it, and I do see this very often, the person that sold you the house saw you coming and knew they could get top dollar from you since you are out of state. You will not get the price you paid for the property without it being on the market for quite a while---if then.

    It seems to me that you tried to do some of the right things; going to the area to view, getting a PM etc. But there are so many n Memphis that will take the shirt off your back and laugh all the way to the bank. I believe you were misguided by the people you were working with.

    If it were me I would get section 8 tenants in there asap. You can have wholesalers market to their buyers or list it---whatever feels right to you. I'm not sure why you are against wholesalers bringing a buyer but they could be your best option.

    For PM I would jump on a call with @Derrick Craig quickly. He is honest, knowledgeable, wonderful to work with and knows Memphis like the back of his hand. I receive no referral fee for recommending him. He has been a great resource for many of my out of state/area buyers.

    I sent you a private message also.

    This too shall pass and you will be a better investor for it!!

    Wishing you a fantastic 2015!

    2Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    Thanks Bryan and Melodee.  Some great advice.  I already left a few messages with Derrick.  Apparently, he is well-regarded by many.  Derrick if you are reading this, drop me a line.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Bill Manassero 

      I second Derrick he is one of the few that will deal with this type of asset. Also as others stated getting a section 8 tenant is difficult NOT easy and you can't do it on your own from Haiti..

    Also you don't need coaching to get your money back you are going through your advanced learning course right now. and I doubt you will make this mistake any time soon. There are many other ways to make money in RE without taking on the risks of absentee land lording  which is one of the riskiest you can do.

    I wrote an E book for Aussie investors that were getting the same type of treatment you have gotten from marketing companies.. I would be happy to send it to you.. It will give you some guide lines and things to watch out for when you can't be here.

    As others have stated you have a falling knife.. I have been there as well. The problem with these areas is what was once a decent neighborhood can then turn over time and end up being a war zone area... Its like a slow creep...

    Next time around buy something very nice settle for less cash flow if you bound and determined to be a land lord.. And NEVER fall for the rental guarantee.. Chris Clothier and I are aligned on this one.. all that means is you paid FAR to much for the property.

    send me a PM I will send you my book and wish you the best of luck  and hopefully Derrick will call you.. I have a couple of Hood Rat duplex's there myself and derrick did offer to buy them.. albeit for 1/3 of what I wanted but he did offer.  But I bought mine at tax sale for under 10k each duplex... if that gives you any indication of value..  

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    11y

    If I had a dollar for every time I received an email or read a post like this, I would not only need to buy RE, but I wouldn't need to do anything else - I'd be independently wealthy!

    Please - do not confuse BP for a magician.  Please BP - tell me what to do...Look at what you've bought!!!

    We cannot waive a magic wand and fix every mistake you've made.  The time to educate yourself was before you pulled the trigger on this one.  Deal with this - let it go at a loss to someone who is local and has the capacity to make it work.  Then educated yourself - then do it right on the next one...

    Good Luck!

    0Reply
  • Bill Manassero
    OP
    Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes
    11y

    Hey Jay.

    Thanks for the feedback and advice.  This truly has been (and will continue to be) an education.  Yes, send your eBook ([email protected]) too.

    Looking forward to the adventures ahead.

    0Reply
  • Melodee Lucido
    Real Estate Investor · OR · Member since 2012 · 390 posts · 133 votes
    11y

    Bill,

    It was great to connect with you. Derrick is on a holiday vacation. He will be in touch ;-)

    Talk soon!

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Bill Manassero 

      Book has been sent.  good luck...

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Julia Rowling
    Real Estate Investor · Greenville, SC · Member since 2014 · 76 posts · 23 votes
    11y

    I'm going to go ahead and say this -- I think the pictures are very unappealing.  I have no knowledge of the local market, let alone the neighborhood (though bars on the windows generally don't bode well...) that these properties are located in, so I don't know what your competition looks like.  But the place looks very low-end.  The first picture is highlighting a dead stump in the foreground, and the second, and giant gap where a stove should be.  Was this really "turn-key" without appliances?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Julia Rowling 

    its SOP  (standard operating procedures) to not put any appliance's in these homes until the tenant moves in.. same with HVAC some times  condenser unit water heater etc etc.

    If you install them new and leave them for any length of time they will get stolen nearly 100% of the  time...

    this is why I have said many times that these types of investments just are not appropriate for anyone who does not do this for a living...

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Julia Rowling
    Real Estate Investor · Greenville, SC · Member since 2014 · 76 posts · 23 votes
    11y

    @Jay Hinrichs  -- Thanks and wow -- you just don't know what you don't know!

    0Reply
  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    11y

    3418-20 Brutonwood Cove

    Hi @Bill Manassero 

    I went ahead and made a video of your property today it seems like you are having such a tough time with the previous turnkey provider that sold you this property.. I understand we have not spoken on the phone nor by email but seems like you are in a bit of a pickle. @Melodee Lucido @Jay Hinrichs 

    and @Bryan L. 

     Thank you all for the kind words and confidence in my integrity and the job/business I am doing here in Memphis TN. This is another reason why BP is such a great site!!

    As far as your property goes seems like you have tenants on the 3418 side which I verified with the your neighbors across the street. The rod iron door on the front of 3420 has been stolen and the window upstairs was broken. The rod iron door in the back of 3418 looks like it is about to grow some legs as well!!! :) Here is some good news it still has both AC condensers outside and it doesn't seem to be trashed or destroyed. I don't know how either of them look inside but it's safe to say they both are secured and not wide open.

    FYI- It is definitely not as bad as many have stated so keep your head up this is a temporary road block to bigger and better things for you and your future real estate investing..

    https://www.dropbox.com/s/2qs14yjsufcv7z9/3418-20%20brutonwood%20cove.AVI?dl=0

    12Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Derrick Craig 

      nice work Derrick   that is going to brighten his day... He got to the one person who can hopefully help him...

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free