Why do people invest (or not) in Memphis?

Question

Your top 3 reasons to invest OR your top 3 reasons to avoid Memphis.

Dean Harris · Answer

My portfolio in Memphis is strong because of the entry price point and the tenant base. I have had several vacancies pop up during the pandemic and I have not had any issues with finding quality tenants for higher rent than I expected. I have one on Obion in 38127 and this is a historically a $700-$750 rental and I got a 2 year lease (Non Section 8) for $800 on the 2nd day it was marketed for rent.

The work force is driven by "Blue Collar" jobs with FedEx, IP, Logistical companies, etc and those people are usually tenants.

Lastly, we have seen appreciation recently and that has historically been found here.

Lots of really good reasons to invest in Memphis.

Sean Tagge · Answer

Hello @Amedeo M.

Here are some recent articles to help see why I moved to Memphis TN to invest in the market.

#1 has show strong rent growth even through the pandemic.

https://www.apartmentlist.com/...

#2 suburb city ranked best place to live

https://www.commercialappeal.c...

#3 has seen great appreciation over the past few years.

Also @Sean T. Hey man never met another Sean T before!

Sean T. · Answer

@Amedeo M.Hey, my firm invests in SFRs that are stabilized and "mostly updated to completely done".  In theory some on here call that turnkey but it's not turnkey in the sense of a company sells us properties, we buy deals that hit our metrics.

On the neighborhood piece, all over.  We won't buy in the toughest spots but all we really do is focus our price and expectations on returns for different areas.  We have yields we need to hit.  This is the north star we focus on which helps to ensure we aren't location/property focused but rather KPI/metric focused.  I find that I can locate a scary story or nightmare for every single market in the US.  The thing is, how many people go out of their way to post about how easy or great an area is?  It is always the negative reviews we see.  I think, again, this is about return/risk and your expectations.

Your point on appreciation is definitely something to consider if that is your primary goal.  It does matter to me as well but I look at that as part of my yield or IRR(not an exact science on appreciation).

My real feeling, if you have heard bad things and it is something that bugs you, you should look at other areas or the premier neighborhoods and decide if the yields are worth the investment.  Keep it about the numbers.

Timothy Lewis · Answer

• 1.Price Point
• 2.Rent Ratios
• 3.Southern Hospitality

Amedeo M. · Answer

@Dean Harris

Interesting.

What are the best zip codes or streets even? I hear sometimes is street by street there.

Where “blue collars” like to live?

Amedeo M. · Answer

@Dean Harris

Thank you!

Dean Harris · Answer

@Amedeo M.

I sent you a PM. I have a break down of all the investment zip codes I can share with you.

Amedeo M. · Answer

@Sean Tagge

I am going to read it and get back to you :) thanks

Amedeo M. · Answer

@Sean T.

Thank you.

You bought turnkey or have a team in place?

In which Neighboors did you invest? (class real estate locations and properties)

I heard very bad stories about Memphis and criminality that, beside the issues itself, affect the long term appreciation.

Why do people invest (or not) in Memphis?

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