Interested in Small Multi Family Value Adds/BRRRR

7 Replies | Memphis, Tennessee

Hello,

I'm currently an OOS real estate investor and manage a small portfolio. I'm considering Memphis to start investing in, in order to diversify. The end goal is to BRRRR multifams on a larger scale, but I'd like to start smaller - say 6-10 doors.

Ideally, I'd like to: 

1- purchase something a little more turnkey while I build my team 

2- increase the NOI by renovating a couple of units here and there and manage expenses more diligently

3- Total cash on hand is ~$1.2m, although I'd prefer not to use it all at once.

4- The idea is to either buy with cash to try to secure a better price. Then rehab, and refinance, with the goal of building enough equity so that I can refi all the cash back out.

Or 

Use a traditional lender, put down 10-20%, and try to build enough equity by increasing the NOI, so that I can go back to the lender a few months later and refi the original down payment back out.

5- I'm not too familiar with Memphis, but I'd prefer to invest in areas that are gentrifying (ie: going from a C ->B), or find a mismanaged property in a C+ to B area that's already built up.

If anyone can recommend some neighborhoods, and zip codes, I'd greatly appreciate it.

Promotion
Ashcroft Capital
A national multifamily investment firm
Three Reasons Investors May Prefer Real Estate
Read three reasons why investing in real estate private placements may provide several advantages.
Read More Here
Originally posted by @Jason Ayala :

Hello,

I'm currently an OOS real estate investor and manage a small portfolio. I'm considering Memphis to start investing in, in order to diversify. The end goal is to BRRRR multifams on a larger scale, but I'd like to start smaller - say 6-10 doors.

Ideally, I'd like to: 

1- purchase something a little more turnkey while I build my team 

2- increase the NOI by renovating a couple of units here and there and manage expenses more diligently

3- Total cash on hand is ~$1.2m, although I'd prefer not to use it all at once.

4- The idea is to either buy with cash to try to secure a better price. Then rehab, and refinance, with the goal of building enough equity so that I can refi all the cash back out.

Or 

Use a traditional lender, put down 10-20%, and try to build enough equity by increasing the NOI, so that I can go back to the lender a few months later and refi the original down payment back out.

5- I'm not too familiar with Memphis, but I'd prefer to invest in areas that are gentrifying (ie: going from a C ->B), or find a mismanaged property in a C+ to B area that's already built up.

If anyone can recommend some neighborhoods, and zip codes, I'd greatly appreciate it.

 Cool thing about Memphis is there is like 14 Turnkey companies down there. So it shouldn't be hard at all for you to talk shop about the various neighborhoods because I know a lot of them work differing areas.

@Jason Ayala a market that isn't already on everyone's radar is the Quad Cities, which means that it is not oversaturated with investors. There are good multi family deals there and the area is definitely gentrifying. There is a shortage of rentals so the rental market is very strong. On top of that, Amazon just announced they are building a $250M distribution center there and hiring 1000 new employee's. I'd be happy to share more insights with you if you want.