Memphis rental Market

3 Replies

Hello there,

I’m a out of state investor, I’m following David Greene’s plan. I’m interviewing real estate agents and property managers so I can purchase my first few out of state homes.

I was curious if anyone in the Memphis Tennessee area could give me some tips and pointers. I’m looking at buying a few 75k homes to rent out. I was curious if 75k homes are more likely to be in a war zone area? Or if I’d be better off purchasing a more expensive house as a rental for a better tenant pool.

I’d also like to know what side of town or areas to stay away from. I’m looking for cash flow as of right now.

I’m gathering all the information I can before I pull the trigger.

Thank you for the help!

Originally posted by @Patrick Flanagan :

Hello there,

I’m a out of state investor, I’m following David Greene’s plan. I’m interviewing real estate agents and property managers so I can purchase my first few out of state homes.

I was curious if anyone in the Memphis Tennessee area could give me some tips and pointers. I’m looking at buying a few 75k homes to rent out. I was curious if 75k homes are more likely to be in a war zone area? Or if I’d be better off purchasing a more expensive house as a rental for a better tenant pool.

I’d also like to know what side of town or areas to stay away from. I’m looking for cash flow as of right now.

I’m gathering all the information I can before I pull the trigger.

Thank you for the help!

 Patrick,

Are you looking to purchase homes in need of repair for $75k or homes that will have a 75k value after repair?  I will give you some of my thoughts, but that clarification will help.

@Chris Clothier

Homes that were ready to go for 75k.

Or should I be looking for houses more in the 90-110k range?

This will be my first out of state rental, I’m not very confident yet on doing out of state rehabs. So mostly looking for ready to go houses with light rehab

I think you can find better opportunities in the 90-110k range although many will be in challenging areas.  When I say challenging I mean that there is a lot of work to be done to improve access to services, food, gas, better schools, jobs, etc..  The price you pay will be determined by the fact that there is a high demand for investment housing.  Most likely there will be some demand for owner occupied housing in these price points, but it will be limited and even those wanting to own the home will be challenged in finding suitable financing.  In other words, these are low price points for a reason.  Can you make money? - yes.  But, you also need to have understanding and empathy for the area you are investing and be prepared to be a responsible owner - in my opinion.  Keep the property to a high standard and hire a management company that treats your renter like a resident, not like a rotating money machine. Little mistakes like failing to understand where you're investing or hiring the wrong contractors or managers will not only lead to a likely loss on your end, but also continue the cycle of insuring that the property you bought stays low in value and the challenges to the area remain in place.

 Spend some time connecting with agents here on BP and talking to different management companies.  One thing I would avoid is any agent or Management company that says we work with everyone and in all areas.  That could mean that they lack the specialty to understand an area.  You can look right on a listing service and connect with investors or search on here.  Be patient and speak with multiple people before moving forward.  Who you work with will be important for your success.