Memphis, Chicago, everywhere else...

[Jackson Long]

Hey folks,

I am on a road trip at the moment scouting properties.  I was going to pull the trigger on a couple in Spokane, but got cold feet.  The cash flow from the stuff in Memphis is just soooo much higher.  It looks a bit like the costs are lower in general and I am wondering if that is actual or marketing to make them look better?  Also Chicago scares me a bit and I don't know why.

Can anyone speak to Memphis and the expenses or provide any other thoughts?  Same for Chicago really.  I am trying to decide if I should head directly out there for an up close look.

thanks

[Stephen Akindona]

The expenses in Memphis are the same typical expenses you would expect with any real estate investment anywhere. Obviously what you pay to get grass cut in Memphis versus other places will vary but we have all the same typical expenses. Maintenance, vacancy, capex, property management etc. The 50% rule works here to give you a good idea about what your cash flow will look like. Also it really depends on what area of town you are investing in. Certain areas have high turnover and vandalism and other areas do much better on these expenses but cost more to acquire. The important thing is really knowing the market you want to invest in and analyzing each deal on an individual basis. Hope that helps it seems like a vague answer but it really depends on the deal.