Memphis Class C Neighborhood Investment Profile - Actual Numbers
I’m currently focused on A- and B+ properties in Memphis because of the better tenant pool, vacancy, repairs, etc. however, I’ve heard that my overall returns may be better if I focused on a few C properties (comparisons were made between the risk and return of large and small cap stocks). However I’m hesitant because of all the challenges I’ve seen on BiggerPockets. What I (and probably others in a similar position would be interested in seeing) are some actual real life numbers (not fluffy opinions) from experienced property management companies who work in those areas (I'm looking at you @Douglas Skipworth, @alex craig, @James Wachob, @Chris Clothier, @James Martin, @Curt Davis).
Most of you are using professional property management software (such as PropertyWare, Appfolio, yardi, buildium, etc.) that makes finding this information about your portfolio fairly straight forward. I know that these kinds of numbers may be considered competitive intelligence so there may be some reservations about posting. However, as BP is a sharing space some of you may be open to it – and it would certainly go a long way to making me (and probably others) open to investing in those neighborhoods.
I think it would be great if you could filter down to a given zip code (37127, Frayser, in this case) and provide the following information:
- Zip Code: 37127
- Time Period (please filter your results for a three year time period, if possible, otherwise please state the period of time used)
- Number of Properties Currently Under Management (if possible, please remove any of the properties owned by you to remove any bias; also, include properties that were held in your management for any period during this time – not just those that were held the full period)
- Total Potential Monthly Rent (the value of rent that would have been brought in if there was no vacancy)
- Total Contracted Monthly Rent
- Total Rents Received
- Total Late Fees Assessed
- Total Late Fees Received
- Total Deposits Collected (initially provided by tenant)
- Total Amount of Deposits Retained (not returned to tenant due to damages, etc.)
- Total Maintenance/Repairs/Make Ready/Expenses Paid
- Total Number of Evictions
I’ll leave out Cost of Evictions, Utilities, Property Management Expenses, Property Insurance, financing, and Property Taxes as these may vary widely per property and may not be paid through the Property Management Company. After I get some responses I’ll make some reasonable assumptions for these and include those when I repost with the summary findings.
An example response may look like:
- Zip Code: 37127
- Time Period: 36 months
- Number of Properties Under Management During This Time: 150
- Total Potential Monthly Rent: $2,970,000
- Total Contracted Monthly Rent: $2,673,000
- Total Rents Received: $2,138,400
- Total Number of Late Fees Assessed: 1,350
- Total Amount of Late Fees Assessed: $67,500
- Total Amount of Late Fees Received: $50,000
- Total Deposits Collected (initially provided by tenant): $200,000
- Total Amount of Deposits Retained (not returned to tenant due to damages, etc.): $150,000
- Total Maintenance/Repairs/Make Ready/Expenses Paid: $400,000
- Total Number of Evictions: 30
If you can provide the information in this format, we can get a really good picture of the investment profile for these neighborhoods. Thanks for considering it!