REI Nation (Memphis Invest) Case Study - Barltett (Memphis), TN

[Dan T.]

Hey everyone, long time listener, poster and reader - first time investor. I have been in the analysis paralysis state for a solid year. I get super close to making a move and back off when it's time to put pencil to paper. I feel that the simplicity of the BRRRR model is overstated - sure, it's the best way to create the most equity but also the riskiest way to enter the world of real estate investment. I have a full time job (55-60 hours per week), 2 daughters under 2 years old and a personal life so i started looking heavily into turnkey for my first investment.

I understand that TK isn't the fastest way to create wealth or equity. My goal is to have 15-20 of these under management in the next 10-15 years; the long game on this will hopefully outweigh the opportunity cost forfeited by choosing the TK model. In researching Turnkeys, it seems there are a LOT of companies to avoid. I narrowed it to Norada, Spartan and REI Nation. After researching the companies and markets in which they operate, then seeing Chris' replies on here and seeing his clients ALWAYS handled even in situations beyond their control, i decided to move forward with REI Nation.

I spoke to Taz to start,  he got an idea of what i was looking for. $150K-$200K property, A-B neighborhood, good schools, decent cash flow ($200+) when traditionally financed with 25% down and a COMPLETE renovation. Taz passed me along to a lender, I got preapproved and was passed over to Rick to hone in on their available properties. I looked at several in Arkansas, Oklahoma, Texas and Tennessee.

I finally saw one i loved in Barltett, TN 34814. As of today, I've locked my rate and put the Home under contract. I have a conversation planned with REI on Monday, i'll post all details as they happen.

[Rhett Tullis]

Not to hijack this (and be aware I ONLY know OKC ) I was recently lowballed on an offer by a prominatnt "turnkey" operation on a rental we have listed for sale for an investor.  we were a bit stunned by the 50% below asking offer as was the seller.  We did some digging on recent transactions by this potential buyer.  Here is what we found.

-They recently bought a property for 45k from a wholesaler we work with often

-They rehabbed the home and resold it to an investor for 120k

-The Zestimate (which for okc metro is always inflated) is 69k and that is being generous.

While they did a stellar reno and the house I am sure is awesome it was sold for well above what it is or will be worth in my lifetime.  I know the neighborhood well it is in and I have bought and sold there and manage dozens in the neighborhood.  If this was the only "deal" i have seen with seller I would not even be posting this but I have seen several examples.  

Needless to say these buyers have been taken to the cleaners.  I do not fault the "turnkey" seller but please everyone buying out of state - DO YOUR HOMEWORK!!

It is one thing to buy for cashflow and for the numbers to "work" for you but when you pay 20k or more than what any potential buyer will give you for a home in our lifetimes you are putting your investment and your future at risk.  Especially if you scale up as some have recommended in this thread.