Memphis, TN War Zones

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Memphis, TN War Zones

Christian T.
Wholesaler · San Diego, CA · Member since 2012 · 32 posts · 4 votes

What are the war zones in Memphis, TN zips or cities you wouldn't invest, buy or walk at night.

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Bryan L.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
11y

I tend to keep my investing about 280 miles east of Memphis.

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  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    9y

    @DJ Rogers

    I am available anytime!!

    1Reply
  • DJ Rogers
    Memphis, TN · Member since 2016 · 11 posts · 8 votes
    9y
    @Stephen Akindona @Derrick Craig thank you both for the reply! Will be reaching out to both of you soon!
    0Reply
  • Suzane Ivas
    Investor · Saint Petersburg, FL · Member since 2016 · 29 posts · 14 votes
    9y

    @Stephen Akindona.   Thanks for your reply.  Some good information and I do strongly suspect the tenant screening process is failing me. But what if the tenants are section 8 tenants, any advice on these?

    Thanks 

    Suzy 

    0Reply
  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    9y

    Ah, your earlier post makes more sense now? Section 8 tenants are typically rougher on the property than cash paying tenants. Screening is still important when doing section 8 because there are good section 8 tenants out there so your screening may still be an issue. Is there any particular reason you are making your rentals available to section 8 tenants?

    0Reply
  • Suzane Ivas
    Investor · Saint Petersburg, FL · Member since 2016 · 29 posts · 14 votes
    9y
    Hi Stephen. There is no reason we are making them available to section 8 other than the PM putting them in. It sounds as though we have a choice and perhaps we try the cash tenants instead. Either way the PM is history. I have no confidence in them. Thanks.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Suzane Ivas  there is a reason in those areas IE tougher or rougher areas section 8 is popular..

    1. Generally the rent is much higher than cash.

    2. Cash paying tenants in those areas don't pay consistently to at all after a few months and you have evictions along with trashed house.

    3. Its not your PM most of the time.. its where you chose to buy your properties that's the issue.

    Your getting schooled right now on why its important in the cash flow markets as an out of state hands off investor to buy at the top of the market not the bottom.  AS you state a 4k turn over just ruined 1 to 2 years of cash flow you will never get back and it just gets worse.

    Suggest you look long and hard at exiting and getting into a situation in Memphis were your rents are well north of 900 and cash only with those that actually qualify.... other wise you will continue to provide housing as a charity  IE your donating your money to house someone who really does not care... remember what your usually dealing with here and why you have this damage.. I have no way of knowing but if I was betting I would bet  single mother many kids no father figure house trashed when they left.. they take their voucher and go to the next Turn key house that just has gotten rehabbed and do it all over again.. vicious circle..  

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  • Simon Ruiz
    Glendora, CA · Member since 2016 · 106 posts · 21 votes
    9y
    Jay Hinrichs Interesting Concept.. It's actually better to buy at the top of the market?? From how I interpreted your post the market conditions actually help you deploy an exit strategy in the event things don't workout? However, what if they do? Won't you be missing out on potential appreciation gains? Do you have a case study that demonstrates your point?? Thank you
    0Reply
  • Vivek Khoche
    Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes
    9y

    @Suzane Ivas - If things are failing for you then the list is pretty long and starts with how, when and where you bought the properties. What is your game plan to exit the market? Your best bet is to read every page of the following link and get in touch with OP.

    https://www.biggerpockets.com/forums/311/topics/227602-difficulty-selling-rental-properties-at-loan-amount

    Good Luck Investing

    Vivek

    0Reply
  • Diane G.
    CA · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Suzane Ivas, @ Jay Hinrichs, 

    War zone properties anywhere, not just Memphis, takes special personality to manage it...

    I have a friend who bought 44 units in a C- location in phoenix... he described his experience as 'someone moves in, pay for 6 months, dont pay for 6 months, 3 months to evict, and $3000 for make ready".... So I doubt it is your PM, or screening.... I tend to think it is just the nature of war zone properties.....

    1Reply
  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 887 votes
    9y

    Memphis is a "street by street" market. You need to know the city well, in order to know where you are investing -or-  find a great team! Ideally you would find a company that has everything under one roof. Acquisitions team, renovation crews (fully licensed and insured), Property Management, and a Real Estate Investment Brokerage in case you ever decide to sell.

    By teaming up with a solid firm you can mitigate your risk and have some "boots on the ground" that have your best interest in mind. 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Simon Ruiz  yes I have 200 case studies and well 15 years experience at the street level at this and over 2,000 transactions to fall back on ..  exit of war zone is not a mystery or something that is not known to most in the field.

    1. wholesaler to sell to another investor because the house is vacant and trashed.

    2. local investor who will only pay the 2% or better rule and you as an Out of state investor paid 1% rule so you take loss.

    what you won't do is sell to someone to live in it .. there are no homeowners looking to buy low end war zone properties basically in any city .. by definition at least using James Wachombs definition C and D class is 100% renters and that's about right. You buy those assets at your own financial  peril.

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    3Reply
  • Lygia BernardesPro Member
    Investor · Orlando, FL · Member since 2016 · 113 posts · 24 votes
    9y
    Hey everyone, I also invest in Memphis and loved all the posts here! I'm always interested in growing my network, so please feel free to PM at any time.
    1Reply
  • Cameron Andrews
    Real Estate Investor · Tennessee · Member since 2016 · 46 posts · 3 votes
    9y
    Dean Letfus I see lots of great responses from knowledgeable investors here, a lot from a few years back. Wondering if you or anyone else can provide an opinion on Carrington Ave in 38111? A basic look via google maps shows a house half burnt down on the street, but like others have said, there are some nicer-looking houses too (and I'm not aware of the details or current status of the burnt picture on google maps) Price range is listed at < $50k so I do appreciate that it can be a more transient type of tenant Thanks
    0Reply
  • Vivek Khoche
    Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes
    9y

    @Suzane Ivas- As mentioned by others 38116, 38118 are turning into war zones, for the  same obvious reasons of 38128. This used to be darling zip codes few years back. For start to end read the link and network with OP :

    https://www.biggerpockets.com/forums/311/topics/22...

    Good Luck

    Vivek

    0Reply
  • Vivek Khoche
    Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes
    9y

    @Cameron Andrews- I really appreciate your courage to ask for 38111 from thousands of miles away. For the best description of 38111, read the most authentic link on BP:

    https://www.biggerpockets.com/forums/752/topics/40...

    If you are still sold to 38111, PM me I can connect you to  OOS investor with 8 properties for $285, all  netting $5K.

    Thanks
    Vivek

    PS: I do not sell anything.

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    9y

    @Cameron Andrews tha is just south of Park and west of Highland, it's not a great area. I lived in Memphis when I started investing and  I have helped investors in many countries invest there. If you are off shore it is just not worth trying to make these C grade areas work. Even with good management they are just a headache.  

    1Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y
    I have been on waitlist with MSHB since January. I am finally almost at the very top of the list of investors and they've been sending available properties to me (among other investors towards the top) for about the past 1.5 months. I've tried to get a few but always end up losing out to someone else higher on the list. Going back through those properties. I started a tally of the zip codes they're buying in. Here's the breakdown: 38127: 9 38115: 1 38111: 2 Seems like a good chance more come available in 38127. I am trying to stay away from Frayser, if possible. Seems like no matter where these properties are, investors are still jumping in. Any advice?
    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y
    Just expressed interest in one in 38128. $91K purchase price, $960 rent. Thoughts?
    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    What about: 

    3456 Dawnridge Dr, Memphis, TN 38118 

    3/2 in Hickory Hill, attached garage, $84,000 purchase price, rents for $885/month.

    @Dean Letfus

    @James Wachob

    0Reply
  • Mark HartPro Member
    Developer · Memphis, TN · Member since 2017 · 352 posts · 148 votes
    9y

    @Mark S. Hey I just sent you a PM on behalf of James!

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    @Mark Hart, thank you for sending me a PM to solicit your group's properties, however, I was simply curious about the address/neighborhood above.  Thanks, anyway.

    0Reply
  • Mark HartPro Member
    Developer · Memphis, TN · Member since 2017 · 352 posts · 148 votes
    9y

    @Mark S. 38118 is a step above Frayser yet below 38115 and is a popular rental market for certain investors. The price and rents are very fair for the area yet those also depend on the rehab. Apologies for the solicitation. 

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    @Mark Hart, thank you.  That's the type of info I was looking for.  Much appreciated.  

    0Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    9y

    @Mark S. it's another area that is "OK". I see a lot of turnkey companies go looking for streets that won't turn up too much bad info online but are still problematic often. This is one of those. 38118 was a great area a few years ago but has degentrified.   And the numbers are pretty awful.

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    9y

    Thanks, @Dean Letfus.  I'll try my luck there with MSHB and see how it goes.  Fingers crossed on the neighborhood.   

    1Reply
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