Why is Memphis such a competitive market?

Question

So, backstory.

My partners and I decided that Real Estate is the vehicle in which we are going to become financially free. We are from Canada, which, as a foreign investor, presents it's own difficulties and frustrations, but nothing we aren't going at, head on.

We recently decided that Memphis is going to be the market in which we hammer down on. What I'm curious about, is, why is Memphis so competitive?

Stephen Akindona · Answer

Yeah, Memphis is competitive because of what the market has to offer! We have a high base of tenants versus owner occupants! 60% of the county are renters versus owner occupants, which ranks as one of the highest percentages in the country. Price point is very attractive for investors making it a lower barrier to entry as well as higher cash on cash returns then other markets!

Tons of turnkey solutions here and so that helps foreign and out of state investors purchase properties here! I'm local so I am obviously biased but I love Memphis! Let me know if I can help you in anyway!

John P. · Answer

I like my Memphis rentals overall but my PM is killing me on the turns. I liked them a lot at first but it seems like they just keep seeing how high they can go on repair costs. :(

Cj Powderhorn · Answer

Very solid renters at ALL price points.  I have had renters for 5, 5, 6 and 7 years and they are still there.  Of course I have fantastic property managers.  Great employment opportunities at all levels as well - Fedex, Amazon, St. Jude, etc.  Top choice for is MSHB - fantastic Turnkey and they have lots of experience with overseas buyers.  If you are looking for cash flow, this is your place!  Also, depending on what you can find, there are some higher priced areas with more possible appreciation.

Hank Lee · Answer

Hi...can you share any property manager recommendations? We're on our 3rd property manager in 4 years. Lack of communication, lack of follow through on maintenance items, charged for things that are not our responsibility, I could go on...

At the moment, we have only one property, but we've got money for one, possibly two more, but I have zero comfort level in Memphis PM.

Thanks.

Lynnette E. · Answer

I do not invest in Memphis.  I live on the other side of the state, but did look at Memphis before deciding I wanted to invest more locally.

Some of the things to watch out for is that Memphis has good areas and bad areas, but they are not clearly defined like in some places.  Gangs can rule one block and a few blocks over can be a really nice area.  The houses may look nice, pretty brick, etc. in an area that is not nice and is dangerous.  Don't depend on the photos to determine if an area is nice.  Make friends with a local person who is not a part of the deal, has no money to make in selling you anything to get another view of  the area.

IT is hard to collect rent in a war zone.  It is also hard to maintain a house in a bad area as the locals will recycle everything you have in the house quickly.

PMs that will work in some areas are not available.

The other main thing to look at is that the population in Memphis in trending downward, loosing a percent or half a percent each year historically.  Google Memphis population trend.

Memphis was hit very hard with the Corona Virus, one of the worse areas in TN.  Unlike most of the country, the folks here that got sick are in the 20-30 age range.  (Rumors that they got it from Mardi Gras party and brought it back, so that is why the age is lower, but them age impacted has stayed low in that area.)  Depending on how fast these folks fully recover, this area may be  a lot slower opening in TN.  Many TN areas are opening next week.  I think, personally, no inside information, that Memphis may be slower to open.

Tyler Tapley · Answer

If you private message me...I’ll try and give you some more property management names.

Tyler Tapley · Answer

Happy to discuss the market or provide recommendations for contractors and property managers...just let me know how I can assist.

Thanks,

Cj Powderhorn · Answer

@Jared Comeau I bought my first round in mostly 2009 and 2010. I've recently found a great resource that will sell other investors property with a renter, ledger, etc. You're not getting a 'perfect' investment property but you will save money.  I just invest for myself, no professional interest.  PM me if you'd like more info.

Jared Comeau · Answer

@Stephen Akindona thank you so much for this insight.  All the replies so far really seem to solidify our choice to hammer down on this market and make it our starting point.

Tyler Tapley · Answer

There is a lot of money here locally and from foreign buyers. lot of good info.

Some good agents.

Lot of good turnkey companies that know what to pay and where to buy.

Zillow and our registry of deeds system is good.

In short...money and information here is easily accessible. Happy to discuss further if needed.

Why is Memphis such a competitive market?

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