All Forum Posts by: David Hutson

@Joseph S.,

As you can see you won't find many turnkey companies in that area.  Only one or two are successful in that area.  I know from experience as I own several homes in Frasier, and again, only a few companies are successful in that zip code.  Especially starting out in Memphis, I wouldn't start there unless you are ok with high turnover, repairs and evictions.  The trick, or should I say gamble, is that you find a good person/family to be the tenants.

I know Douglas Skipworth and he manages several of my homes and his company has good property management if you want to buy and pay to have the home repaired.  I also know Alex Craig, I meet with him when I go out to Memphis, and Chris Clothier, his company is the biggest in the US.  I met Chris for the first time in person a few weeks ago and chat with him often on BP.  Curt Davis is also very experienced in Memphis and sells many homes.  So I would follow their advice. 

You are asking for a lot of details but I can sum it up quickly using a very small sampling since I have 12 homes there and an investor from CA.  Frasier is a lot of work.  The returns are higher when you get a good tenant as they maintain the home and pay their rent.  It takes longer to find that tenant though and may take 3-4 turnovers to find the right one.

Good luck.

David,

I have several homes in this zip code.  38127 is a difficult area with several good pockets in it.  When you hear that property management is what will make or break you, multiply that by 5x for this zip code.  It's easy to buy a $20-$40k property in this area but it's difficult to get and maintain the good tenants.  If you can get that part down you can do well.  In my opinion there are only a handful of management companies that do really well in that zip code.  I have a few homes that have had the same tenant since I purchased them a few years ago and some that get turned every year with damage/no rent when the tenant left.  I have even had one burn down earlier this year.  Not sure what caused it but I found out the tenant had several large snakes in the property that went up with the house.

I like the area for rentals if you get good homes with great management.  Would I live there, probably not but there are definitely good pockets there where I would feel safe. 

I strongly recommend to all new investors to the area that they don't start with that zip code.  Maybe if you spend a lot of time there or know the city it may be ok.  I tell people who want to get into the cheaper homes to move up a little in price and buy in 38128, to the east.  It's one of my favorite areas in Memphis to invest.

Good luck, pm if you have any other questions.

Afternoon,

What are you looking for in a SFR? What parts of town are you looking to invest in?

David

Sorry,  I was only thinking about the response for Irko.  Matt Theriault is the owner of Cash Flow Savvy and Mercedes is his partner/works with him. 

I have worked with them but decided not to buy based off of my partners experience with them.  I was in the Marine Corps so we started working with them and wanted to see how good their homes are.  I will say that Matt started with nothing and built his company up.  Mercedes does a great job with the marketing.  

After the purchase of one home it went just ok.  The management didn't go so well after a few months so it was transferred to another company in Memphis.  It needed almost 10k in repairs/updates prior to the new management company would take over.

I would say Matt is very good.  You just need to determine what end of the pool you want to work with.  If you like the lower end homes, referring to price and areas, then he may be a good option. 

I have purchased from several turnkey companies in Memphis and they all have different styles and customers that they cater to.  Once you know what you are looking for then message me and/or ask the question again in here with more specifics.   To answer you question, I like turnkey since it's easy to get into and somewhat passive.  Would I purchase from Matt's company, no, but not because he has a bad company.  What he offers isn't what I'm looking for.

David

I have been investing in the Sacramento area for 16 years.  The prices are up towards previous highs again and the returns aren't worth it for me compared to other states.  My opinion is you can wait for the appreciation here or take the cash flow back east.

I am currently starting sell off my properties here and purchase back in Tennessee as the returns are higher.  Gloria  says she has neutral cash flow with 25% down.  I earn 13% back east.  To me it's better to take the 13%. 

If you want to buy in Elk Grove I have a few half plexes in a great part of town.  The tenants have been in the homes for more than 2 years.  Price about $200k, rents are $1,250.  Last turnover had a week of vacancy between tenants.  It's a cheaper pocket in an area with $300k+ neighbors.  Let me know, it's not what I would be looking for if you want to invest in the Sacramento area it may work for you.

Morning all,

I heard about it on here and someone from MI had also sent me an invite, which led me to driving down.  I have spoken with them in the past but do not have any homes with them currently.  I do know that they are a great company and they have about 3,600 homes under management so that should tell you something.

I attended a great meet and greet held by @Chris Clothier and his family from Memphis Invest tonight.  1st class event with new investors mingling with their current owners.  About 100 investors met in Irvine to talk about the company and turnkey investing without any sales pitches.  There were at least 15 owners in attendance which was excellent as it allowed all the people who haven't invested with them yet to get real information on how they really perform.  They had food, drinks and they even took care of the parking.  Thanks to the Memphis Invest family. 

Everyone I spoke with had nothing but good things to say about them.  I showed up early and was the last to leave, speaking to almost half the people there.  Did anyone else who attended learn get good info? 

@Michael Dunn,

Ensure you complete detailed research and make sure the tenants are well qualified.  Not all of them are bad but I find the issues mostly come up with the inspection at the end of each 12 month period. The tenants don't take care of the homes and then you must make all repairs found in the inspection or risk losing monthly rents, even if the tenants don't let the repair people in. 

I'm sure there are good section 8 tenants out there but there are many who are not and will move to the next house when yours isn't repaired in a timely manner.

And it's good if yo find a tenant who pays at least part of the rent.

  David

@Lane Kawaoka,

It's a little bit of a pain.  I'd still like to continue purchasing and will continue, especially as I convert my properties in CA to Memphis using 1031 exchanges.  I like owning physical property would like it better if I were there managing the rehabs.

I have also been investing in crowdfunding sites.  I just put a chunk of change into a deal for several properties on Front Street in Memphis.  It's still investing out there and the returns are higher than I get on my properties so we'll see how that goes.  I'll check out your site and see what you are doing.