How hard is it to do a long distance fixer upper?

Question

Hi BP,

My turnkey long distance investment in Memphis TN went okay until the tenant stopped paying her rent last August.

The PM evicted the tenant last December (several months of non payment). I had to pay $5500 rehab fee to make it marketable right after tenant was evicted last December.

Then in January the house was destroyed by a squatter (PM told me so). The PM was not helping much in getting my insurance nor did anything to prevent the house from further damage. It was just left rotten. So I have canceled the agreement with the PM.

We are thinking to do a rehab and sell it ourselves. But we are in Boston and have never done a long distance repairs before.

Have you ever done it? What do you suggest on finding a good local contractor? How do I manage the contractor long distance?

The houses in the neighborhood goes for $50k-$60k.

Thanks

Antoine Martel · Answer

Nancy.

I invest heavily in Memphis and it hurts to hear that you are having this problem with the tenants and also the property management company.

I would recommend finding a new property management company and using the contractors that they have on call to make the renovations to the property.

Let me know if you need any property management recommendations.

Rick Imby · Answer

The book by one of the BP guys-- David Green about long distance rental ownership would be a great place to start.  Excellent book.---

Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties

I bought it from Amazon and it is excellent.

Kiera Underwood · Answer

@Nancy Wang find local investor flippers and ask who they use. I'd reach out to real estate friendly agents/teams in Memphis, ask them who the big local flippers are and then do whatever you can to get in contact with them. Once you make contact, use their guys.

Nancy Wang · Answer

Update on the property in Memphis:

We went there on Sunday and came back next day on Monday.

On Sunday we drove around, talked with neighbors, hired the neighbor cleaning up the yard and cut the grass, found a realtor's sign on the next block, called him and he became our agent.

On Monday we went to the City for the hearing (the house was in code violation), extended the grace period from the City, hired anther landscaper we found in Burger King (saw his truck on the parking lot and asked the first guy we thought was the landscaper). He removed a dead tree and cut the bushes.

Agent posted the for sale sign on the yard we flew back Monday night.

Tuesday we had two offers and we accepted the higher offer of $23k!

Not a bad ending. We end up not losing money on this deal...

Nancy Wang · Answer

The property's zip code is 38127. I've been told it is not very good neighborhood - lots of drugs and crimes going on. But when I google it the area looks just fine. Wide and quiet street, good descent houses - I don't see any trash laying around.

We are going to go there in a week for the first time. I'll keep you posted on how it goes.

Chris Clothier · Answer

@Nancy Wang -

It is difficult to give you advice without knowing where the properties are located.  There are companies and even individuals here on BP that will be better suited to help you based on where the properties are located in the city.  I'd be happy to assist you in finding the help you need, but it is difficult to know who to advise you talk to without knowing.

Zach Lemaster · Answer

@Nancy Wang Make sure you get references from all contractors/PM companies!  Many contractors see that out of state number, and automatically increase prices 20%...seen it happen again & again!  Keep us posted how it's going.  What part of Memphis is the home in?

Nate Gottesman · Answer

@Nancy Wang I second David Green's book - glad you're starting it, there's a lot of good content in there that'll be relevant to your current situation.

Realizing that you're not local and don't have much of a team down there, aside from your PM, do you still have a relationship with the realtor that helped you purchase this house? They may have some suggestions on contractors they'd recommend/ trust. The realtor I use has helped me with smaller scale type issues.

Hope this helps!

Mike Huerta · Answer

@Nancy Wang Can you share which PM it was? I just entered into contract on my first rental, and it's in Memphis. I'd love to dodge this PM mine. Plan is to long-distance it from Northern CA.

@Antoine Martel Would love some recommendations. I need to start making calls tomorrow. Property is in 38133. Any help is appreciated!

AJ Singh · Answer

@Nancy Wang

You need to visit your property to determine the repairs needed.  There are threads with reputable property management vendors in Memphis on BP. They should be able to help you out in repairs and getting it leased quickly.

Unfortunately, turnkey providers are heavily focused on Memphis due to cash flow and some of the best cash flow is achieved in C to D areas which are best left to local investors .

You can reach out to @Chris Clothier. He is active on the forums

How hard is it to do a long distance fixer upper?

Most Popular Reply