All Forum Posts by: Phillip Gainey

Contact Jim West at Reedy and Company. He is our property manager. We had to go through three before finding him.

Have you owned rentals before?

PG

It's not a war zone, but by advise would be to stay out of that zip. 38128 is okay mostly the eastern half of the zip (raleigh-frayser). It really depends on the neighborhood.

What are you look for?

PG

Companies? Rex, you should talk to INVESTORS who have actually purchased turnkey properties in Memphis. If you were in the market for a new car, would you seek the advise of car sales persons, or past customers and consumer reports?

PG

Venkat,

Another alternative, if you are looking for cash flow in Memphis, or anywhere else for that matter, is to find these local investors and fund their property acquisitions through hard money loan, or even a joint venture.

It's a lot less stressful, and risky than owning rentals out of state. We make 14%, with 5 points on six month loans. Our ROI the last two years has been 20% a year, which includes one loan we had to foreclose on.

The key is finding the right local investor. We've found a couple and just keep making loans to them. They love us!

The best thing about it is you are dealing with people who know the area, know how to pick properties, rehab them, market and sell them!

Good Luck,

PG

P.S. Living in a high priced area can be a good thing. I know a guy who refi'd his home in SoCal for 5%, and invested the proceeds at 15% in RE secured loans in the Midwest.

Networking is best. All of the people we've loaned to or done JVs with have been people we've met on BP. Only had one bad experience.

I suppose it's a lot easier if you have money, and are trying to find where to allocate it, than to not have it and try to find it someone to risk it.

Establish a track record of successful deals you can show prospects.

You DON'T have to find money locally. There are people all over the country with money to invest. It doesn't have to come from NC. We've had much better success leveraging the experience and knowledge of investors around the country by making loans, than buying and holding actual rentals out of state. Huge hassle. Property managers, repairs, tenants...etc.

Good luck,

PG

I am a private investor who has purchased turnkey properties in Memphis. I also make private and HMLs. I have nothing to sell.

I'm trying to help other would be out of state investors not fall for the hype, and hear the "other side". How sellers will leave out expenses in their advertising.

I've received numerous pms from other BP members thanking me for calling out turnkey sellers and sharing my experience. I wish someone had done that for me. Of course it will ruffle the feathers of people with something to sell.

OTOH, if I post anything incorrect or untrue, I would hope people would point it out to me.

PG

P.S. And yes, like the the gentleman above, I'd love to hear some actual return's clients are making.

In the other thread, we were talking about a specific property he had advertised on BP. We were debating how much that property would realistically cash flow. He claimed estimated cash flow of $256 a month in the thread, and was about the same in his BP ad. That seemed unrealistically high because he wasn't including vacancy and maintenance.

So are you saying it's okay to exclude these items from ad listings, so long as you cover it during the "consultation phase"? Whatever the heck that means?

PG

I'd be interested to know this as well.

We discussed one of his properties in a thread 4 months ago (recently resurrected).

http://www.biggerpockets.com/topics/65128-chris-clothier-memphis-invest?forum_id=92&page=2

It became clear he wasn't including vacancy or maintenance costs into the equation:

Chris posted

Phil posted

No response.

I don't know if it was just an inadvertent oversight to leave out these costs, but companies do it all the time. I guess this is why the OP titled this thread the way he did. Duh?

Sorry, it doesn't pass the "smell test" that a property in that neighborhood of Memphis selling for 75k and renting for 825 would be a big cash flow cow.

Unless he was just calculating Year 1. But what about the years after? If you advertise "buy and hold" cash flow up the kazoo, then sorry, you should INCLUDE MAINTENANCE AND VACANCY EXPENSES!!

It's a joke folks. Found it on my brother-in-law's FB page. Don't know where he got it.

When I saw it, I just knew I had to post it here.

PG

Been having trouble with my tenants in regards to taking out their trash properly. I erected the following sign.

*** WARNING FROM MODERATOR ***
*** OFFENSIVE LANGUAGE ***
*** DO NOT CLICK IF PROFANITY BOTHERS YOU ***
http://a4.sphotos.ak.fbcdn.net/hphotos-ak-ash4/s320x320/385987_176835489077380_100002527918235_343873_1826926910_n.jpg

A little harsh I know, but they really piss me off!

PG