TLDR: Over the course of a 3-year relationship with Memphis Invest, I had multiple negative interactions and moved my portfolio to a different PM.

I am in the Air Force and move every 2-3 years. I’ve always been interested in real estate, but the demands of the job, and my growing family didn’t leave time for it. I was listening to the Bigger Pockets Podcast, and heard Chris Clothier talk about his company, Memphis Invest, and the concept of Turnkey Real Estate. It sounded perfect! After doing some research about it, I decided to give it a try, and bought my first property in Dallas TX. The sales process was smooth and easy. The team answered every question, was super responsive, and exactly as Chris had described; an A+ company. I was a little concerned about the fees, a full month’s rent for a new tenant placement, 10% of rent monthly, and a 15% markup on all repairs, but Chris said I was paying for great service, and I had gotten it so far. That was the end of my good experiences.

My initial tenant moved out after about 3 months. That happens, I thought, they split up, no one’s fault, just bad luck. I was surprised when the repairs then cost the full security deposit of $1375, but figured it wasn’t my money to begin with, so it wasn’t worth arguing about. It took another 3 months, but we finally got another tenant in the property. Things were going to go smoothly from here, I was sure. So I bought another property. Chris said that when you own only a single property it’s either feast or famine, and I wanted more properties anyway. This property was in Memphis, TN.

Things were good for about 10 months after that; I was having my monthly check-ins, but there were no repairs/issues, so life was good.

Then I got a monthly deposit that was seriously light, like $500+, which I thought was odd since their policy is to get owner permission for any expenditures over $400. It turned out there had been a series of plumbing issues (all with the same toilet) that had required multiple plumber visits, each under the $400 limit so they didn’t notify me. While this is technically correct, it is not in the spirit of the understanding. The idea being that if there’s a major issue, the owner would be notified. In my mind multiple plumber visits should have warranted a call. Not in the moment, and not for approval, but for awareness so I knew they were on top of the problem, and not to be surprised (like I was) when the bill came. When I queried, it turned out the plumber had just been there again, and discovered roots in the pipes, which definitely required owner approval because it was a $1000+ charge. I gave the approval immediately, recognizing that I wanted to inconvenience the tenant as little as possible because they are the true commodity, and it was repaired promptly. However, getting all that information was like pulling teeth. It felt like I was there only to pay the bills, but should have no interest in the property. Now, I’ve read Chris Clothier’s book, and this is totally counter to his principles, so I was really surprised. When I suggested there might be a reason for the roots being in the pipes, no one was interested in thinking about, or talking about it.

Let’s rewind a little. Part of buying a Turnkey property is that there really shouldn’t be any major repairs required because they’ve done a total makeover just prior to my purchase. Now, the Dallas property had had some foundation problems when Memphis Invest purchased it, which they had had repaired. When I think of foundation repairs, and plumbing, it seems likely to me that in the course of the repair, the plumbing might be damaged. When I suggested that, it wasn’t even acknowledged. No one would talk about that possibility. At the time, I didn’t realize it, but in the foundation repair report, it suggests that plumbing be checked following the repair, because there’s a real possibility of damage! Hindsight.

So this left a pretty negative taste in my mouth for Memphis Invest, and I began looking for other Turnkey companies, thinking maybe there was something better out there.

I found Memphis Investment Properties, and purchased a property with them, as a compare and contrast type of experiment. So far, I’ve had a tenant who struggles to pay rent, and gone most of the way through the eviction process, and they’ve been great communicators.

But back to Memphis Invest.

Property values have been going up in Dallas, and so have property taxes, so when my tenant decided not to renew their lease (after 2 years), I decided this was a good time to sell. While the tenant’s lease was up in Feb, they wanted to stay through the school year. That was great for me, as I wasn’t in a real hurry to sell, and making it convenient for the tenant is not only good business, but also the decent thing to do. I communicated very clearly that I was flexible, and the tenant could stay as long after the school year as they wanted. This was expected to be the end of June, we’d wait until they moved out so we could get the place cleaned up, then put it on the market in mid-July. Everyone was on-board.

About a month later, I engaged a realtor, who went to check out the property. She met with the tenant, who was very concerned about her status, and didn’t know if she would be able to stay through the end of the school year. Thinking this odd, I clarified with the property management team, who contended they’d re-verify with the tenant the plan. That was the last I heard.

Next thing I get is an automated notification that the tenant has given their notification to vacate. This happened in May, which I thought was a little early, but ok. Then I reread it. I got it 7 May, they vacated on 6 May, and notified us(?) on 2 April. Uh what!? Once again, I have to do the heavy lifting. So I start asking the questions about what’s happening with the property, where are we on getting it ready, etc, because at this point, I’m losing money every day it’s empty. The local repair crew swings into action, and the very first thing they do is put up a for-rent sign. What?! Didn’t we already discuss, several times, what the plan was? I told my realtor that the tenant had vacated, and to begin preparations to list, so she swung by the property, and was aghast at its state. Carpet ruined by pets, smelled like smoke, cupboard doors broken off, blinds destroyed; in a word - thrashed. That made me feel better about the $3500 bill I’d received (and paid). The Memphis Invest team was already tasked with cleaning it up, and they’re a 5-star team, so my confidence was high that they’d get it taken care of. My realtor also identified that I needed a range, so I asked the team to install that, and they said no problem.

The proposal I was sent said most properties took 6 days to complete repairs. After a week, of no information or status, I emailed asked what our timeline was. I got word back that they didn’t know, but hoped another day or two. In two days, again hearing nothing, I asked for new status, and received word that everything was complete. Not sure why I wasn’t notified, but I moved on, letting my realtor know that she could proceed with scheduling pictures and getting us on the market. She swung by the property again, to get a look at it in “market ready condition,” and the work wasn’t done! The appliances weren’t in, the paint hadn’t been done, the place wasn’t clean, the blinds were still thrashed, and the electricity wasn’t on! At this point, my patience is fraying, but I have to keep going. So I re-engage the property management team, who apologizes for not verifying the work, and got it done. However, this cost me another week.

We progress with selling, and get an offer on the first weekend. Great! Almost through. Wrong!

I’m looking through my bills, and notice the tenant was actually refunded a portion of their security deposit. Considering the state of the property, I think that’s odd, and query. I am sent the bill the tenant received which is considerably different from the one I received. Recognizing that the tenant is not responsible for “normal wear and tear,” I still think a $2500 difference in the bills is extreme, and again noting the state of the property, I state my case. It isn’t addressed. I’m fobbed off with the idea that legally if the tenant pays rent and completes their contract, they’ve upheld their side of the bargain. What?! However, this issue is shortly overcome by events.

As we noted earlier, the electricity wasn’t on to the property, but that had been fixed. What hadn’t been was the gas and water. Turns out they were turned off too! Where is the 5-star property management I was promised and paid for? Spoiler, it never turns up. So, I request the rest of the utilities be turned on. Two days pass, and I hear nothing, so I ask again. This time I get a response that it’ll be no problem. That same day an email comes in saying I have a negative balance. I’m not surprised by this because all of their estimates were low, so I respond that I’ll take care of it that day. Life got in the way, and I didn’t get to it that night. My bad, but considering how terrible their communication is and how lengthy everything has been on their side, I’m not overly concerned. Still no news on the utilities. The buyer’s inspector has already been out to the property, and it’s from them that we found out the utilities were off, so I’ve got a buyer who’s flapping in the wind, while my gold-medal property management team takes their sweet time. I email asking for status on the utilities, adding that it’s time sensitive. I get back a short email saying that they can’t do anything for me until my negative balance is taken care of. WHAT?! At this point I’m incredibly frustrated, so I fire back with a heated email (no foul language, though I was sorely tempted), CC-ing the customer service lead, Nathan Grey. I get an email back saying he doesn’t appreciate my tone, but to call at my convenience to talk about it. Now, I’ve been trying to call him, left messages, suggested times to meet, with no success, so I’m really fired up. I call immediately and get no response, leaving messages on both phone numbers. He calls me back, and after listening to my story, proceeds to lecture me about how I don’t know their processes, he doesn’t appreciate my attitude and generally points the finger at me as the problem. Never once did he allow that his team had done anything wrong, been slow, or in any way outside of reasonable. “They have a process to follow” he kept saying. Recognizing this was the same fellow who didn’t even engage on the idea the foundation repair might have affected the plumbing, I didn’t push my luck, and we agreed that I would pay the balance when I got home, and he would direct his team to turn on the utilities. I didn’t try to engage on being seriously over charged for the repairs, or the tenant’s refund of their security deposit. I know my place. Pay the bills and don’t ask questions.

The whole thing was incredibly frustrating. I asked for the utilities to be turned on, when they should never have been off. They said they’d do it, but then hold me hostage over a bill they’d presented less than 24 hours previous. It’s all compounded by the fact that I have another property with them! Which is generating income! Even if they didn’t trust me to pay (which is ridiculous since I’ve always paid very promptly), there are other funds they could tap. How much easier and smoother this could have gone if they’d just done what I asked. Instead they were totally concerned with themselves, and didn’t look at the larger picture, which is what I’ve come to expect from Memphis Invest.

At the same time, my Memphis property’s tenant had been in place one year. I thought it prudent, to check in on them and make sure they weren’t running a meth house, or whatever. I asked (in April) for a walk through to happen. This isn’t a standard service, but can happen for the low low fee of $125 (+15%) I’m told. Whatever, I say yes, and am assured that it comes with a full inspection report including pictures. As I said, I’m in the Air Force, and I’m now in the middle of a cross-country move, with my 3 kids, and my 35-weeks pregnant wife. I could use some platinum customer service support at this point because I have other things on my mind. But it doesn’t come. Two months later, when I remember, I ask about the report. The response, is “what inspection report?” This is doubly frustrating because I asked in the same email thread, so the answer is in the email. But I summarize the history, and re-make the request. They’ll look into it. No word. So I ask again. The report will be ready in a week. Ok.

The report comes in with a few recommendations on repairs. I ask the obvious question; can we get those repairs taken care of? No response.

I have a monthly email/phone call with the customer service team, but they don’t review my file before reaching out. They don’t look at my properties, so who’s managing them. I guess me. But when I ask questions about their status, it’s met with resistance. I recognize that I don’t get called for charges less than $400, that’s the whole point of a property management team. But, having that data for the monthly email seems appropriate. “Here’s the status of your property this month”, aught to be the template for that conversation. That happened once after the plumbing incident, but never before or after in a 3+ year relationship. Disappointing. There are a few other relatively minor incidents, but this has already become a 2500+ word review, so I’ll conclude.

I remember Chris Clothier saying there’s no such thing as a good property management company. I thought he was trying to break that stereotype, but I haven’t seen it, and I’ve given it a pretty thorough chance.

P.S. When I then transitioned property management of my Memphis property to Reedy and Company (the PM arm of Memphis Investment Properties), Memphis Invest bungled the handoff, and my tenant was almost sent to collections by the Memphis Invest team! Ludicrous!