Memphis? Memphis. Memphis!

Memphis, Tennessee
Memphis Real Estate Forum
9yFollow

Memphis? Memphis. Memphis!

Chad Baird
Lender · Cardiff By The Sea, CA · Member since 2015 · 5 posts · 10 votes

What's up with Memphis? Hey BP a friend pointed me in the direction of Memphis and said that it is where I should be looking at my next round of investment properties. What should I expect in Memphis? What cap rates I should be shooting for, price points, appreciation and cashflow are expected?

I live in San Diego and my last round of properties I bought back around the 07-08 time frame were in NC, TX and CA. I'm looking for cash flow on this go around.

Any insight would be greatly appreciated. 

10Reply
217 views

Most Popular Reply

David Hutson
Rental Property Investor · Tampa, FL · Member since 2013 · 404 posts · 421 votes
8y

@David T.,

Many of the areas I invest in are probably what you would consider bad.  I'm looking for a decent looking street with the 3-4 houses on each side of the prospect home kept up well.  Yards cut, no parking on the grass, no garbage piled up everywhere.  I like to see pride of ownership/rentorship.  That won't guarantee the house will perform well because any neighbor can change and the next door neighbor can totally trash a house in the future.  I feel if many of the neighbors keep their homes up it will spread and much of the time, not always, the other neighbors don't want to be the people with the bad looking house.  Owners, if they see it, will not want their home to be the bad home on the block also.  I'm fine with the low-income, high rental neighborhoods since everyone needs somewhere to live as long as the houses are in good shape.  I don't focus as much on crime because criminals have cars to and drive to the good areas to steal ac condensers also.  They don't only commit crime in the bad areas.

Here is what I'm doing with a wholesale house I'm in contract for today: I start with looking at photos on Google and Trulia, then any recent listing photos.  Next I drive by or have someone there drive the area.  If all of that is good I'll sign a contract and then have someone walk the house to see what needs to be done inside.  If there is a tenant inside I can see how they live and if they are following the lease.  This house I'm buying now has a dog in one of the photos.  I read the lease and it states no pets so I know that will be one thing I will have to work out with the purchase and the PM company. 

I had the person walking the house take photos.  I received 149 good photos of the interior and exterior of the home.  That gives me info on whether I want to continue with purchase or revoke my offer.  From there I get a bid on what needs to be repaired.  For a tenanted home I'll negotiate a credit for items that are worthy to be given at closing.  Then close upon the agreed timeline and then either fix the immediate needs items or save the cosmetic issues for when the tenant leaves.

I don't treat any of the homes as personal or try to have homes as nice as I want to live in.  It's a business and people need homes to live in.  I keep my houses updated, fix broken items quickly and ensure I have great property management.  I have fired a few property management companies.  If they don't perform or don't want to ensure my homes perform I use another.  I currently work with three PM companies in Memphis and just fired one.  You need to watch them.  Some try to be the cheapest and won't do all the needed repairs.  So here is why you need to have someone watching over your PM's if you aren't sure they are taking good care of your homes.  (short tangent below)

I recently had a house that had a window air conditioner in the wall to cool the dining room.  We installed a whole house a/c system and when the a/c company completed the installation the maintenance people took the a/c unit out of the wall and patched the siding on the outside.  When the tenant moved out it was vacant for two months.  I couldn't figure out why.  I took the home to another PM I use and when they did the walk through they told me their was a framed hole in the dining room.?.? I determined that they didn't patch the hole on the inside of the wall.  The new company patched the hole and it rented within two weeks.  This is the biggest problem I have found with the PM companies.  They don't always do a quality job on the turn.  If you have a home that is vacant for a month have someone walk the home and take video or photos or videochat with you.  I have only had a few homes go vacant for more than a month and each time I have found the rehab was done poorly and that was the reason for it not renting.  Once I fix the small issues, usually under a few hundred dollars, the homes rent within two weeks.  Spend the money to get a quality turn completed.  If you half *** the turn you will end up with a half *** tenant, if anyone at all.

22Reply
See this reply in the discussion

85 Replies

Jump to latestLatest
  • John S.
    Rosemead, CA · Member since 2014 · 35 posts · 7 votes
    8y

    I was looking at the BiggerPockets 2017 Housing Trends for USA by @Scott Trench .  I noticed that Memphis, TN is one of the top 10 cities to invest primarily because the rent-price to purchase ratio is one of the highest and the city also has one of the highest appreciation rates for 2017.  However, in my further study,  I also noticed that Memphis, TN is NOT growing in population and possibly declining a bit.

    My question is how can the population be declining but also still be appreciating at 6%?  Are people leaving the city but also the ones that are staying are moving into their own homes in Memphis, TN which make the prices go up?  My only concern with Memphis, TN is the population decline.  I'm sure those in Memphis, TN can calm my fears though ;-)

    2Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    8y
    Originally posted by @John S.:

    I was looking at the BiggerPockets 2017 Housing Trends for USA by @Scott Trench .  I noticed that Memphis, TN is one of the top 10 cities to invest primarily because the rent-price to purchase ratio is one of the highest and the city also has one of the highest appreciation rates for 2017.  However, in my further study,  I also noticed that Memphis, TN is NOT growing in population and possibly declining a bit.

    My question is how can the population be declining but also still be appreciating at 6%?  Are people leaving the city but also the ones that are staying are moving into their own homes in Memphis, TN which make the prices go up?  My only concern with Memphis, TN is the population decline.  I'm sure those in Memphis, TN can calm my fears though ;-)

    Memphis proper, like a lot of major cities in America, may not be growing, but the MSA is.  Here is some data from Bestplaces.com.  Population growth for the MSA is not major, but is not declining either.

    I am going to attach some excel data that you can duplicate by using the data you get from Bestplaces.com.  We use these data points to evaluate the next cities for Memphis Invest to grow into.  Pay close attention to recent job growth.  That is a net number.  So often the good news of new jobs is shared, but rarely is the bad news of jobs lost by a city.  Net number takes into account both new jobs and lost jobs to give you a more accurate number.

    Podcast Guest on Show #224
    REI Nation4.576 Reviews
    WebsiteView Page
    4Reply
  • Conrad Metzenberg
    Rental Property Investor · Santa Barbara, CA · Member since 2015 · 78 posts · 34 votes
    8y
    Originally posted by @John S.:

    I was looking at the BiggerPockets 2017 Housing Trends for USA by @Scott Trench .  I noticed that Memphis, TN is one of the top 10 cities to invest primarily because the rent-price to purchase ratio is one of the highest and the city also has one of the highest appreciation rates for 2017.  However, in my further study,  I also noticed that Memphis, TN is NOT growing in population and possibly declining a bit.

    My question is how can the population be declining but also still be appreciating at 6%?  Are people leaving the city but also the ones that are staying are moving into their own homes in Memphis, TN which make the prices go up?  My only concern with Memphis, TN is the population decline.  I'm sure those in Memphis, TN can calm my fears though ;-)

     So this is my concern too.  I have the same concern with St Luis.  So basic economics; increasing demand+limited supply should translate to lower vacancy rates, higher rents and appreciation...so we want this.  That's why net negative migration from a metro  area is a real turn off for me.  But it sounds like that is macro where certain areas are experiencing positive migration?

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    8y
    Originally posted by @Conrad Metzenberg:
    Originally posted by @John S.:

    I was looking at the BiggerPockets 2017 Housing Trends for USA by @Scott Trench .  I noticed that Memphis, TN is one of the top 10 cities to invest primarily because the rent-price to purchase ratio is one of the highest and the city also has one of the highest appreciation rates for 2017.  However, in my further study,  I also noticed that Memphis, TN is NOT growing in population and possibly declining a bit.

    My question is how can the population be declining but also still be appreciating at 6%?  Are people leaving the city but also the ones that are staying are moving into their own homes in Memphis, TN which make the prices go up?  My only concern with Memphis, TN is the population decline.  I'm sure those in Memphis, TN can calm my fears though ;-)

     So this is my concern too.  I have the same concern with St Luis.  So basic economics; increasing demand+limited supply should translate to lower vacancy rates, higher rents and appreciation...so we want this.  That's why net negative migration from a metro  area is a real turn off for me.  But it sounds like that is macro where certain areas are experiencing positive migration?

    Conrad,

    We just moved into St. Louis earlier this year and are getting up and going quickly.  That'll happen sometime later this year after we prove the concept that we have the rents correct.  Here is the same data for St. Louis.  We really like this market as a whole.  It is very segmented, but the right areas of the city really excite us as investors.

    Podcast Guest on Show #224
    REI Nation4.576 Reviews
    WebsiteView Page
    0Reply
  • John S.
    Rosemead, CA · Member since 2014 · 35 posts · 7 votes
    8y

    @Chris Clothier Would Memphis proper be everything inside the 40 and 240 highway ring and MSA is everything outside the ring?  

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    8y
    Originally posted by @John S.:

    @Chris Clothier Would Memphis proper be everything inside the 40 and 240 highway ring and MSA is everything outside the ring?  

    That's a good way to put it for a 30,000 ft view.  It is not quite 100% correct, but really close.  The MSA includes 17 counties and includes northern Mississippi counties and eastern Arkansas and a few other Western Tennessee counties.  All of those areas affect the local economy.  The areas inside the county, but outside the city itself (suburbs) are also growing and add to that MSA number, but the MSA is a big area. 

    Podcast Guest on Show #224
    REI Nation4.576 Reviews
    WebsiteView Page
    1Reply
  • Ellis HammondPro Member
    Investor · Leawood, KS · Member since 2017 · 178 posts · 108 votes
    8y
    Hey Chad Baird reach out and I can send you our latest deal deck on something we closed recently in Desoto (just south of Memphis). This was a larger MF property so not sure what your criteria is but could be helpful to compare.
    0Reply
  • Ellis HammondPro Member
    Investor · Leawood, KS · Member since 2017 · 178 posts · 108 votes
    8y
    Chad Baird also like to connect more about your business. Looking for more connections here in SD. Do you do CRE lending or single family? Outside of CA? PM me
    0Reply
  • Dean Iodice
    Member since 2018 · 5 posts · 1 vote
    8y

    I'm looking at a company called Memphis Invest, they specialize in turn key real estate investing. Anyone have experience with them and is turn key a good way to go?

    1Reply
  • Jamie Dally
    Member since 2018 · 1 post · 0 votes
    8y

    Hi Dean,

    Keen on meeting getting to know you and sharing ideas on Memphis 

    0Reply
  • Corey Boland
    Member since 2019 · 1 post · 0 votes
    7y

    New to Bigger pockets but not real estate. I have been investing in STR properties and doing well. looking to expand Airbnb market and heard there was money to be made in Memphis. Anyone doing well with STR's up there? I am currently in NOLA.

    Thanks

    0Reply
  • Ryan Alacon
    San Diego, CA · Member since 2018 · 30 posts · 12 votes
    7y

    @Chad Baird I'm going to try and revive an old thread. Any updates on your Memphis investments?

    0Reply
  • Ram V.
    Member since 2019 · 25 posts · 3 votes
    7y

    any updates? is memphis still hot for investing?

    0Reply
  • Tony Win Huynh
    Real Estate Agent · Bowling Green, KY · Member since 2016 · 1 post · 1 vote
    7y

    @Elizabeth Wilson do you mind sending some

    agent recommendations. Thanks!

    1Reply
  • Daniel Wilson
    Member since 2019 · 1 post · 0 votes
    7y

    @Elizabeth Wilson,

    supper interested in the Memphis market!

    Would you be willing to give me your agents contact? Would love to connect with them.

    0Reply
  • Natalie Velayo
    Rental Property Investor · Los Angeles, CA · Member since 2019 · 13 posts · 3 votes
    7y

    @Elizabeth Wilson

    Not sure if this is too forward, but would you be open meeting for a coffee/happy hour next weekend?

    My husband and I will be in town sat/sun and would love to meet up with a local investor for some insight and tips/tricks on the market. Just FYI, we’re interested in sfr/mfr for buy and holds

    0Reply
  • David Iniguez
    Real Estate Agent · San Bernardino, CA · Member since 2019 · 22 posts · 11 votes
    6y

    Hi Michael, Im looking in memphis what zipcodes would you recommend? 

    1Reply
  • Morgan Madill
    Contractor · State College · Member since 2018 · 51 posts · 25 votes
    6y

    @Elizabeth Wilson could you send some agent recommendations my way? Would really appreciate your two cents on it!

    0Reply
  • Mario Am
    Specialist · Nashville, TN · Member since 2019 · 187 posts · 83 votes
    6y

    so many Californians in this thread LOL.

    I just started in Memphis too and its in process.

    0Reply
  • Andrew AkinsPro Member
    Realtor · Memphis, TN · Member since 2016 · 50 posts · 45 votes
    6y

    @Morgan Madill I have invested in Memphis for a few years and from here.  I know a lot about the market and happy to help out.  

    0Reply
  • Kon Zel
    Rental Property Investor · NJ · Member since 2018 · 152 posts · 56 votes
    6y

    I'm revamping my strategy and am still looking for someone local to memphis that can send me quality properties.  PM me if you're in Memphis.

    0Reply
  • Koleton Daley
    American Fork, UT · Member since 2017 · 175 posts · 76 votes
    6y

    @Kon Zel you should reach out to @Tyler Tapley He can help you find what you’re looking for and won’t try to take advantage of you. 

    0Reply
  • Tyler Tapley
    Real Estate Agent · Memphis, TN. · Member since 2018 · 175 posts · 101 votes
    6y

    About 42% of Shelby county sells are to investors. So everyone wants a piece of the pie. Happy to give any advice or recommendation. There are lots of great people to work with in this market. Feel free to message me with any specific questions, we've been helping investors since 2009 and know (or atleast know of) most of the major players.

    Best of luck!

    1Reply
  • Mario Jaramillo
    Investor · Memphis, TN · Member since 2020 · 5 posts · 1 vote
    6y

    @Terrence Branley

    Old thread but what area/ zip do you invest in?

    0Reply
  • Sammie Baker
    Investor · Central Florida · Member since 2020 · 18 posts · 5 votes
    5y

    @Andrew Akins hey!. My team is looking to secure our first property in Memphis. I’d love to get your input. We live in NY and FL so we will need dependable property management for this to work for us.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free