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Updated almost 6 years ago on . Most recent reply
South Memphis Four-Plex
Hello!
I'm fairly new to BiggerPockets and looking for some advice. I'm excited to announce that I'm about to close on my first multi-family unit, a value-add Du-Plex! I will occupy one side as my primary residence to eliminate a mortgage payment. The other side is already occupied and paying $950 a month. Market would yield $1200 but I don't want to go pissing off a 5 year tenant who pays on time (at least not yet anyway).
But I digress...I'm hoping to close on another multi-family unit shortly after the acquisition of the duplex. This property is going to be a four-plex somewhere out of state (I live in MD and RE is too overpriced in my market). Anyway, I'm looking at South Memphis as you can pick up a four-plex down south just north of $100K which would be perfect.
Does anyone here have experience in this market? I know Memphis is a notoriously rough area but I'm from Baltimore and have a pretty good idea what I'm getting into. Anyway, is it worth the hassle to pick up roughly $2000 in cash-flow or should I save my money and try to buy more units in a better area? I really need the cash-flow to fund my real estate business (I'm an agent). Having no mortgage in addition to even $1500 a month is cashflow would be huge for me as I have no debt. My next purchase would be to step up into a commercial loan (4-6+ units) but that's a ways away. I can't afford the down-payment for anything more than $175K. Open to any and all suggestions!!!
- Art
Most Popular Reply
Don't buy in south Memphis from afar!! You may have local experience dealing with rough areas but trust me you don't want to deal with south Memphis from afar. Buy better properties! I know on biggerpockets everyone is so cash flow obsessed, but i am learning (by actually meeting and talking to billionaire investors) that the real wealth is built by growth and appreciation. Don't be 100% speculative but you have to buy in areas where you have some upside potential! Yes, every property must have cash flow, but they must have some upside too!