All Forum Posts by: Alexander Price

@David Pierce

Something to consider when buying turnkey is that you are purchasing a revenue stream. The house is the asset that generates it. Particularly in Memphis, appreciation is not going to make you your money. So house value is not a huge factor. That said, if the purchase price and rental numbers work out for a reasonable COC return, then that is what matters. If your plan is to try and sell quickly (i.e. less than 5 years) then maybe turnkey is not the best choice. If you plan on owning a turnkey investment for ten years with a good management company, you'll make your money back on COC alone if the return is 7%. I think most good turnkeys can do better than that.

Food for thought. 

@Joseph S.

You may consider reaching out to @Dwayne Jones, or to @Derrick Craig. I do not know why I have not made them colleagues online yet, since they both invest in Memphis, but they might have insight. In particular @Dwayne Jones has a personal goal of rehabilitating the C class areas you are referencing, and actually made a passionate post about it recently. Not only that, but Mr. Jones is a contractor and probably has very detailed numbers on the rehab costs as well. Derrick Craig has positive feedback on BP as a property manager and he may be able to help you. I am interested in the numbers myself. 

@Cecil Mason

Being interested in Memphis myself, I looked up the zip code: http://www.city-data.com/zips/38119.html

Not knowing the area, the numbers from your town home deal don't match with the pricing from 2013 data on the site I linked. Make sure you get in contact with a real estate agent or similar expert. Maybe @Alex Craig, @James Martin or @Douglas Skipworth can help you. 

@Tim OHare

It might help you to discern the location of your properties as well. You may get more feedback. The guys from Memphis are all very friendly and typically very responsive.

@Irko Maurizio Sera

Do you know what market you want to invest in? There is a website run by Jay Hinrichs which rates Turn Key companies. Also, you can google most companies, and their PM arms and find loads of information. If you know what market you want, then more people will respond. 

At first look at Cash Flow Savvy, it looks like they have two markets. The bio on one of the co-founder talks about teaching others their system. Spending five minutes the first warning sign is one of the co-founders is in at least two markets with only 5-years experience. Not impossible, but I would be cautious. Again, I only looked at their site for 5 minutes and know nothing about these people.

If you know your criteria and your market, more people will be able to guide you. As far as Turn Keys go, if you want to pursue that route, I suggest posting a general question about best markets for Turn Key investing. I know there are a few that continuously pop up, Memphis and Kansas City. @Curt Davis has a good amount of BP cred as a good turn key provider on this site. There are many others as well.

Good Luck. 

@Dwayne Jones

That was a very insightful post and I think your approach to making rooming houses is clever. Good stuff.

Just curious, but does having rooming houses help prevent damage/neglect to your property? Just curious if the nature of tenants living together drives the standard of treatment to your investments up or down? You hear constantly about this being a negative in apartment complexes, but those tenants don't have shared living quarters. 

@Sheeva R.

Currently the big traffic backup going to San Jose from Gilroy or Morgan Hill is at the Tenant/East Dunne Exit in Morgan Hill. Many Morgan Hill commuters will hop on on the highway from the  north side of Morgan Hill at Cochrane. Coming back to Morgan Hill or Gilroy from San Jose, the slowdown is at Cochrane where the highway loses a lane. People wanting live outside of San Jose readily deal with this issue and know about it. CalTrans has three stops in the south bay, 1 in Morgan Hill, 1 in San Martin and 1 in Gilroy. This helps with some commuters. When I worked in Sana Clara, I dealt with this and could get to work in 40-45 minutes depending on when I left. 

I must agree with @Tom Mozzone about purchase price versus rent. Gilroy will likely have a better ratio. Gilroy has about 3000 new homes going in which is driving more buyers into the area, and bumping nearby home prices up some.  This is happening on the south side of Gilroy near Santa Teresa. Three doors down from me, a 5 bedroom house is going for 695,000, last I looked. With all this, the market is making it hard to find a cash flowing deal. I have not invested in Gilroy yet, but want to. Personally I love the area, lived in Morgan Hill for 23 years and Gilroy for 7 years.

Good luck!

@Alex Craig That was a hell of an analogy. No pun intended. That said, I thought Memphis had stable multifamily complexes once the price tag reached over a 1M or so. I have not really looked into the MFRs out there other than glancing. 

This is great to hear. @David Hutson how did you find out about the event?

@Account Closed brings up good points. A great breakdown of what he is alluding to is spelled out directly in Frank Gallinelli's book. Link is below. I think it is chapter 8. This is one of the 20 recommended by BP. I really like the comparisons of the different valuation methods that are given. 

https://www.amazon.com/Every-Estate-Investor-Finan...