Calling all Mississippi investors - how great are your returns?

17 Replies

Mississippi Investors ,

I have been doing a lot of market research, and I need your experience.

From a micro level, your stats on population growth, price to rent ratios, YOY job growth, crime rate, median income increase, etc... are the best I have seen in the country.

However, on a macro level... the state of Mississippi seems to be one of the worst performing states. Which leads me to my question: 

Have you found Mississippi to producing strong returns?

Here are my top cities that are producing job growth from 3.5-5%; strong median income; strong population growth; and low p/r ratios

I've done ok, but its very important you pick the right property with the right management. Same rules apply as any midwest/ south area. There are very nice areas and very bad areas. 

Have you looked at the MLS? Check Tupelo on the top of your list for example two multi family listing. Just 2. Small towns are hard if you don't know them or get a good manager.

@Joe Applegate As stated above, the most critical aspect of investing out of state is a solid well vetted property management team. I am also looking at Mississippi right now, and found a great PM in Memphis and Jackson. Otherwise, the great properties I am finding are irrelevant.  

I find the returns are incredible, but most of my properties are in walking distance from where I live and I manage most of them myself. To give you an idea, here are some figures. Unless otherwise noted assume I spent 5K fixing it up. 

1. Bought before the recession for 72K. Lived in it for eight years before renting it out. 4bdrm 2ba, 2 car garage. Rents for $950.  

2. 4bdrm 2ba. Purchased for 15K needed 30k worth of work. Rents for $900.

3. 3 bdrm 2ba, 2 car garage. Purchased for 35K, rents for $825. 

4. 3 bdrm 2 ba, 2 car garage. Purchased for 30K, rents for $868. 

5. 2 bdrm 1 ba. Paid 16K, spent 4K fixing it up.  Ramp added for disabled tenant. Rents Section 8 for $770. 

6. Two houses on one property. Front house is 4 bdrm 2ba, two car garage, back house is 3bdrm, 1 ba. Purchased both from a wholesaler for 32K, probably put in 15-20K fixing them up. Rent both together to extended family for $1500. 

The above houses are all in South Jackson, all but one south of McDowell. I'm due to close on a townhouse Tuesday in Byram. It is two bedrooms, 2 ba. in a B+ neighborhood. I'm paying 40K for the townhouse. Will rent for $900-$950. 

Show me any place else where you can get those kinds of returns? But as Jay will testify these properties, especially the ones in SoJackson are hard to manage from a distance. I'm gradually handing over some of my properties to over to a property manager, mostly because I'm having to split my time between here and California. 

Incidentally, I purchased the house I live in for 30K.

@Joe Applegate Mississippi has great potential! The top areas on your list that we invest in are Horn Lake, Olive Branch and Southaven. Hernando is also performing well. You'll notice that these three cities are the closest proximity to Memphis, because of that they have similar returns with quality tenants and appreciating values. 

  Data, appraisals and property details are a bit harder to look up online for several parts of Mississippi so long distance investing can be more difficult than most but it can be worth it!

Feel free to reach out if you'd like to inquire more!

@Susan Maneck I'd love to buy you lunch sometime and pick your brain. I'm currently in the middle of a remodeling project in Pearl. My first flip... probably my last! Leaning more toward rentals every day but Jackson scares me. Do you ever attend the meetups at Scrooges or M7?

Originally posted by @Blake Palmer :

@Susan Maneck I'd love to buy you lunch sometime and pick your brain. I'm currently in the middle of a remodeling project in Pearl. My first flip... probably my last! Leaning more toward rentals every day but Jackson scares me. Do you ever attend the meetups at Scrooges or M7?

 go to the RIG meetings or look up Bob Lucroy.. he has been at it for a few decades.

It sure did! Do you find yourself getting good quality of tenants (not too much headache, damage, etc)? Most of us hear over and over that with such good returns comes "war zone" tenants, causing many to shy away.

Originally posted by @Tim Holmes :

@Jay Hinrichs and @Blake Plamer the best place to find Bob Lacroy is at the meet up at the M7 coffee house every Wednesday at 9:00 am. Bob's a very helpful guy.

 well when i am in town i go buy a bottle of Silver Oak and meet him at 6pm at his house there on the Reservoir.  And we chew the fat while we are chewing on a nice Cab !!

@Jay Hinrichs You nailed it on the head. PM can make you or break you in this market. Finding a good one for the inner Jackson metro area has been a challenge.It would be great if you would start one here as there is a big need.

Taking into account the difficulties in PM within the state, what are the biggest pain points? 

It seems like a good opportunity to create a service that could add value for a lot of investors.

So I keep hearing the admonition for good PM in Jackson MS, my question is, does anyone have a recommendation?  I literally can't get anyone to address my issues, and when I connect on the phone, they "assure" me that all will be taken care of......again....and again....

Cash flow is wonderful until you have a $5000 turn which has now happened twice between 4 properties.

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