All Forum Posts by: Alex Craig

@Amy A. I will be the first to say that most of the MF in Memphis that a typical investor can buy is garbage. I live in Memphis, but own very little MF in Memphis, rather we own ours in Little Rock (I own a large portfolio of SF and Commerical in Memphis). Obviously as an active investor of SF and Turnkey Provider in Memphis, I think highly of my hometown market. The MF areas in Memphis where the #'s look good are terrible. Good MF that is renovated well in a desirable area will return 8 to 9%. I promise you that. If someone sends you something different, I can show you why those returns are not realistic. With Fannie Mae lending on MF on loans over $1,000,000 at rates around 3.5%, there is no reason to sell a good asset for a cap rate higher then 8 to 9%. 

If the returns are looking better then that, then as Walter White said, "then maybe your best course would be to tread lightly." :)

@Keleisha Carter sounds good.

To put some perspective in the strength of market, thus far, our rental collection during COVID-19 in April is only off 5% from last month spanning across 850 properties. This is likely due to many of the jobs here that drive the economy are essential. Like James mentioned, vacancy can be mitigated through good management, providing a home thoroughly rehabbed and investing in the right areas. Unfortunately, I seen over the years and still today, far to many investors get duped into buying a cheap property in a run down, D class area of town. I would say regardless of the market, out of state investors should be hooking up with established individuals who own real estate themselves or with companies that have been in business for 10+ years with solid plans to be around for another 10 + years (who also own rentals themselves). Experience and stability matters--really, that goes for any industry, look at the Tampa Bay Bucs. They traded youth and inexperience for experience and proven success when they signed Tom Brady and let Jameis Winston walk.

@Keleisha CarterI have never heard of Martel Turnkey. Nice website. Noticed their buying entity for their Memphis homes are registered in California, thus I am assuming not locally owned. Their Memphis properties are located deep in 38109, which is fine if in the right area, but the neighborhood changes quickly in that area. I do think local expertise is important when operating in areas like this to have personally driven the area and not rely on metric mapping and online reports. Literally, the comps can change from street to street.

@Chris Clothier Thank you Chris. Hope all is well.

We manage 850 homes in Memphis and our approach is not sending out mass communications to tenants. I think sending out the mass announcement only creates more work for the office and can be misconstrued or interpreted incorrectly as we are OK with an rent moratorium. Rather, we are handling business as normal and will handle these situations on a case by case basis. So far, out of these 850, only 2 have cited not being able to pay, which both provided a letter from their employer. In this case, we would waive late fees and see how much we can get, even if it is only $150. We will put together a payment plan to get caught up when their employment resumes.  The outstanding balance continue to roll over from month to month, until paid in full.  Filing an FED (eviction) is not really good option here if the goal is to get the tenant caught up, also, FED fees will only put these tenants further in the hole. Track record is also important. If the tenant had been paying, there is no reason to think when this is all done, they will not be able to be caught up.  Now for those tenants who are using this as a way to skip a rent payment, they will he handled the way we would handle any delinquent payment.

We manage 850 homes in Memphis and our approach is not sending out mass communications to tenants. I think sending out the mass announcement only creates more work for the office and can be misconstrued or interpreted incorrectly as we are OK with an rent moratorium. Rather, we are handling business as normal and will handle these situations on a case by case basis. So far, out of these 850, only 2 have cited not being able to pay, which both provided a letter from their employer. In this case, we would waive late fees and see how much we can get, even if it is only $150. We will put together a payment plan to get caught up when their employment resumes.  The outstanding balance continue to roll over from month to month, until paid in full.  Filing an FED (eviction) is not really good option here if the goal is to get the tenant caught up, also, FED fees will only put these tenants further in the hole. Track record is also important. If the tenant had been paying, there is no reason to think when this is all done, they will not be able to be caught up.  Now for those tenants who are using this as a way to skip a rent payment, they will he handled the way we would handle any delinquent payment.

Talking to my banker today, he said they are discussing deferring 2 debt payments to the bank and differing those 2 payments to the back side of the loan. Maybe your tenant can go to his lender first or even his suppliers and ask for 60 day terms. Our restaurant biz is down 40% since Friday and expecting more.  Good thing we had been up 20% in January and February. 

@Curt Davis is the meeting still on? Is it BYOBHS (Bring your own Bio-Hazard Suit)? This will be a good one.  Was talking to Dan last week about his MF, very interesting. 

Really, no reason for me to chime in here as Chris gave a good overview.  Only thing I will add is I like Multi-Family much better in Little Rock, this goes for duplex all the way up to large MF units.

Head to head, the University of Memphis beat University of Arkansas at Little Rock, 68-58 :) 

Take that for what it is worth.