I still say working with someone who owns properties is key. You would not invest your money with a brokerage house is the guy handling your money was not invested in the financial markets, real estate should be no different. If not working with a turnkey company, I would work with a Property Manager. I would say most areas to invest in Memphis are terrible. The entitlement mentality here is unreal. Stick to Cordova and Bartlett and you will be fine. Don't get obesesed with buying at a discount. My most recent purchase for my own portfolio, after renovation, I am going to be at 90% LTV, but cash flow is going to be $550 a month.
My suggestion is if you work with a turnkey provider, order a independent home inspection and appraisal to make sure you are not paying over market.
The property manager before the last one fled the state, ALLEGEDLY, with tens of thousands of dollars in security deposits. Had to fire him as well.
The property manager before that guy, rented out my best property to a lady (works for the IRS!) who had 3 evictions in 2008. Judgements out the keister. I had to take these jewels to court twice in 9 months to collect the rent. Ended up evicting them. This property manager was actually surprised when I evicted them and tried to talk me out of it!
I think the cardinal rule of never being a LONG DISTANCE land lord (unless you get stuck and have to), and to invest LOCALLY is true. That is the main lesson I have learned.
You get taken advantage of. By property managers, lawyers, tenants, vendors...etc. Might as put a sign on your back that says "KICK ME".
As for the properties I still own. I evicted the last renter and sold it on a land contract. No leases, no rent to own. I required a down payment equal to one months rent. No option period. Make the payment (equal to market rent), and you can stay. Monthly payment of 1200 is amortized over 30 years. Comes out to a sales price of $144k on a $100k property! No property manager bilking you for repairs, maintenance, stealing $3500 in option money when you fire them.
That's what happened to the last property. It was an RTO. with a $3500 option and 3 year option period. Tenant/buyer couldn't make payment, and didn't want to lose the option money. Stopped making payments. RTO agreement was in the property manager's name. TB claimed that made the agreement invalid since the PM was not the owner. They are suing for the option money. Court date is April 4th. In the meantime, the property manager gave me no final accounting, no keys, and kept the option money. I reported them tot he state RE commission, they did nothing.
This is the kind of crap that happens to out of state investors in Memphis.
I did just what your are planning to do. Don't do it!
Out of state land lording is a mistake.
Btw, I HAVE NOTHING TO SELL! I am not an agent, property manager...etc.
I am a real live investor.
I fell for the "invest in Memphis cash flow properties" marketing hype.
Four years, four property managers, three evictions, and two rentals with all appliances stolen when the tenant moved out, I learned my lesson.
There are better ways to make cash flow in Memphis or anywhere else than being a remote land lord.
Memphis Turnkey Properties
Memphis is wonderful and please come in person to feel the beauty, feel the huge rental market and feel the great home sales for your rental properties.
For your rental home area,
Homes in a nice community with nice schools in Memphis
Homes in only one tax area with no city tax and easy to get into higherway to work
Homes in lower city tax area with nice location
Homes in a great location in Memphis with everything ready for you in less than 10 minutes.
Newer built homes that renter is willing to pay more money each month.
An upgrade old home with nice school district..........
Email me with questions for you and your friends.
Plese give Jing A Ring for all your real estate needs.
JING CHEN ROACHELL, ABR
6525 QUAIL HOLLOW
MEMPHIS, TN 38120
If you would like to discuss your plans and what's going on in the Memphis area, I would be more than happy to talk with you, maybe I can help.
Michael Bellaire, Broker, ABR