All Forum Posts by: Drew Castleberry

Now available is a package of 4 SFR in Memphis that were all renovated last summer/fall of 2015. All professionally managed at 10%.

Property #1

3689 Kerwin Memphis, TN 38128

3 beds, 2 baths, 1,111 sq ft appraised for $62,000 last July

Currently occupied and rented for $675 a month, can be rented for $700+,  lease ends 1/31/2017

Property #2

3401 Birdsong Ferry Memphis, TN 38118

3 beds, 1 bath, 976 sq ft appraised for $60,000 last August

Currently going through turnover but was last rented at $695 a month

Property #3

3801 Brookmeade Memphis, TN 38127

3 beds, 2 baths, 1,322 sq ft appraised for $64,000 last October

Currently occupied and rented for $735 a month, lease ends 10/31/2016

Property #4

4272 Old Allen Rd Memphis, TN 38128

4 beds, 1 bath, 1,053 sq ft appraised for $55,000 last August

Currently occupied and rented for $774 a month, lease ends 11/23/2016

Do not disturb tenants.

Contact for more information.

Drew Castleberry (864) 906-3113

I've bought a few properties in the Memphis area, and can't say really which one is the best. What I would suggest to you is just analyze each property you come across. neighborhoodscout.com, crimereports.com and trulia.com are all great for seeing how safe a neighborhood is. What I can also tell you is that if you need a PM, Crest Core is top notch. I use them with 4 of my properties and they've been nothing but great so far.

use the search function. Brandon did a great write-up on every step to take for screening tenants.

 I'd be looking at $25-$30k to start out, look to get 12-15%. If I were able to complete a few good deals and getting my feet wet I'd probably want to bump that amount up quite a bit.

 David - about what are the loan amounts that your group typically borrows? I'm starting to think that with all difficult/expensive non-recourse lending is, it might be worth it to just be a private lender.

 Not sure how it works in Texas, but you should be able to dispute the tax assessment. Call the county and they should already have system in place to follow for any dispute. I had to do a dispute on one of my previous homes here in SC, and got my tax bill cut in half.

 Search BP  and you'll find a ton of other posts with the same questions and blog posts as well. I'd also suggest consulting a real estate attorney and CPA on which route might be best.

Willem, I just refinanced 4 of my properties for sub $75k amounts with SNMC. To my knowledge they'll go down to $30k-35k.

Contact Steve Bighaus, he's one of the senior loan officers I've dealt with and came highly recommended to me. They did a great job on my loans and don't have any complaints. If you want more details PM me.

Call around to a few property management companies and ask them what they think it could rent out for, they'll be able to give you a pretty good idea, and about how long it'll take to find a tenant.

As for refinancing, if the appraisal comes back at $180k, an 80% LTV is only at $144k, and then assume closing costs are $4k, you'd only be looking to cash out $4k, it's not a lot, but it's better than nothing. In any case, you'll be able to get rid of the mortgage insurance which is huge.

Assuming you refinance for $140k and conservatively @ 4.5%, you can drop your payment down to $674. You would be saving just over $200 a month in your payment alone which is huge! I think you could probably get your insurance a little lower and I don't know what shortage is, but your tenants should be responsible for lawn care. 

What is the "other tax" for? Property taxes in Texas are generally higher than most states due to not having a state income tax.

Assuming $1,400 rent, if you manage it yourself, you would have a NOI of roughly $950, so after your mortgage payment you would clear about $280 a month. Then you have to set up your reserve accounts. I generally use 15%, some use less, some use more. But at 15% you'd be looking at on $70 in cash flow. To me that's not near enough spread, but if you can get $1.5-1.6k in rent, then you could make it work as long as the property is in good shape and won't need any capex in the near future.

You can go deeper into it and more specific but that's just a quick analysis. There are plenty of resources here on BP that can walk you through it.

A quick and easy way to do an analysis, take 50% of the rent ($1.4k *.5 = $700) for all expenses and then what's left over is what you have to cover your mortgage. Looking at it this way is pretty close to what we did above, you'd only be looking at minimal cash flow.

The big thing you need to figure out is what the actual market rent rate is. If it's $1.6k or more I'd go for it, but anything less makes it pretty iffy for me.