Realtor · Memphis, TN · Member since 2019 · 15 posts · 21 votes
Hey guys!
My wife and I are looking to make some actionable REI moves in a few months and are practicing identifying deals in our local area (Memphis, TN). We wanted to get some additional perspective on one particular deal due to our confusion as to why it's been on Zillow for so long? (Link at the bottom)
1) 4 bed 2 bath Listed at 89.5k
2) Flipped/BRRRd Houses at same sq ft have almost doubled in value in that area - so potential ARV 130-170? (No pics or anything, so just going off of neighborhood and nearby comparisons)
3) Appreciation looks promising - A block away from a huge urban development of an old sears distribution center crosstownconcourse.com
4) Reno was said to be around 50k
Is it not necessarily a bad deal, but just a lot of up-front capital for the Reno? Couldn't it still be pulled out of the refi if you were to do a BRRRR?
American Fork, UT · Member since 2017 · 175 posts · 76 votes
6y
@Nick Monge it’s most certainly not a good deal! They have been catching more and more negative feedback from all over the place. I can tell you from personal experience that we’re currently involved in a Civil matter with them for fraudulent activities they performed on us. They offered a settlement but with a clause.. we had to sign a non-disclosure agreement and not talk about any of it. People need to know what this company is all about my friend. They tell you that they can handle rehabs, tenant placement, evictions, and be a one stop shop but I can assure you they are anything but that. If you’d like I can put you in contact with our representing attorney and he’d be more then happy to talk to you about how honest and ethical Crestcore is (Sarcasm haha). Save your money now and run from the deal, everything looks great on a paper and how they’ve presented it but it’s not what it truly seems. You’ll sign on the property and you’ll end up regretting it. I can also put you in contact with other members we’ve connected with to discuss our civil case with and they’ll tell you similar stories. Crestcore is bad news and in my opinion is one of the most dishonest groups in the Memphis market.
Specialist · Memphis, TN · Member since 2019 · 24 posts · 17 votes
7y
@Nick Moore Congrats on you and your wife taking your first steps to invest in real estate! There's so much that could be shared about this deal, and so many different points of view. So, please don't look at mine as the whole picture. It sounds like you have already done a lot of research on the deal yourself, so you are on the right track!
Being in Memphis, I'm familiar with the area and Crosstown Concourse. What I see with this deal is the value of the home you would be buying it at and the ARV you hope to achieve when the rehab is finished. As you know, Memphis is very "pocketed". A house on one street could be valued at 150k while an identical house one street over comes in at half that.
Looking at this street, I see boarded-up windows, a 4-plex not in the best shape, and recently sold comps on a few streets around only reaching 130k for newer builds in the 2000s. You're right that Crosstown could impact the value of that property, and you could do the work to it in the hopes that it pans out, but that just seems like a stretch and a lot of capital tied up into the property. Which is probably why it's still on the market. If you were able to get it at 60 or 50k, the deal would be much better. Plus, until you have a contractor come out and estimate the work and get it appraised, you really don't know the rehab costs or the ARV - so that could also impact the desire to purchase.
So, will it rent? You're all in for $142,000 (purchase price, $2500 closing costs, and rehab). And I see rentals in the immediate area getting up into the 1300s for a newer build and gated entry. So, it would be tight, but it's possible that it's a decent enough deal. I think the issue is that it's AT fair market value and not wholesale or steeply discounted. You would be buying it for what it's worth rather than 80 cents on the dollar. I do see the interest with its proximity to Crosstown, but it's a gamble on how long it will take for the surrounding areas to be impacted by that development and you would want to be sure you don't lose money waiting on the appreciation that may or may not happen. And for the BRRRR method, most lenders will want to see it rented for about 6 months before you could refi.
Again, a ton of thoughts, and I'm sure there are other factors. You are on the right track by running the numbers and analyzing the deal. Keep hunting! There are tons of deals out there!
Let me know if you have any other questions. I'd love to connect!
Realtor · Memphis, TN · Member since 2019 · 15 posts · 21 votes
6y
@Forest Skufca man I never came back to this, but this post was actually super clutch. After riding through the neighborhood with this in mind, I felt like I gained experience without having to actually go through an “experience.” 😅
My wife and I are under contract with a duplex in Cooper Young (#househacking🙌🏼) but after all the craziness sets aside I’d love to connect and talk about past and future deals??
@Forest Skufca man I never came back to this, but this post was actually super clutch. After riding through the neighborhood with this in mind, I felt like I gained experience without having to actually go through an “experience.” 😅
My wife and I are under contract with a duplex in Cooper Young (#househacking🙌🏼) but after all the craziness sets aside I’d love to connect and talk about past and future deals??
Rental Property Investor · Denver, CO · Member since 2018 · 74 posts · 25 votes
6y
Hey guys, I have a property under contract on MALVERN ST in 38104.. What are your thoughts on this area? It's right down the street from a brew house and (what seems to be a) VA hospital. It currently configured as a duplex.. It needs a full rehab.
American Fork, UT · Member since 2017 · 175 posts · 76 votes
6y
@Nick Monge it’s most certainly not a good deal! They have been catching more and more negative feedback from all over the place. I can tell you from personal experience that we’re currently involved in a Civil matter with them for fraudulent activities they performed on us. They offered a settlement but with a clause.. we had to sign a non-disclosure agreement and not talk about any of it. People need to know what this company is all about my friend. They tell you that they can handle rehabs, tenant placement, evictions, and be a one stop shop but I can assure you they are anything but that. If you’d like I can put you in contact with our representing attorney and he’d be more then happy to talk to you about how honest and ethical Crestcore is (Sarcasm haha). Save your money now and run from the deal, everything looks great on a paper and how they’ve presented it but it’s not what it truly seems. You’ll sign on the property and you’ll end up regretting it. I can also put you in contact with other members we’ve connected with to discuss our civil case with and they’ll tell you similar stories. Crestcore is bad news and in my opinion is one of the most dishonest groups in the Memphis market.