New invester from Southern California

[Abigail T.]

Hi everyone. I heard about this website through my loan officer and I'm so glad to stump upon a place where there is so much information. I currently reside in Orange County California. I would like to purchase investment properties with good cash flow and some appreciation. I would like to avoid "bad" areas with high crime and bad schools as much as possible. I have been looking in Memphis and have gotten in contact with some real state investment companies. I have a few questions and appreciate all the help I can get.

1. How is Bartlett and how is the rental market there ?

2. I am interested in a property in Bartlett with a zip code of 38135 going for 149,000 4 bedroom 2 bathroom. Does that sound like a reasonable price and would there be renters that would pay 1500/a month in that area ?

3. Has anyone worked with the company Memphis turnkey properties before?

4. Any recommendations of other great investment areas ?

Thank you in advance 

[Aaron Mazzrillo]

Originally posted by @Alex Craig:

...but a property that rents for $1,450 that is bought for $144,900 (like my deal) should comp out at $165 - $169.

The only equity in this deal is the amount of real cash you take out of your bank and vaporize as a down payment. Unless, you know how to sell houses for free? You might get away with a for sale by owner and maybe... maybe someone will come along that has no agent, but someone still has to pay title, escrow and for any repairs. You could do a lease option. That might work and get you $165K net so you'll make $20K. Still have to pay recapture and capital gains. All that work to make less than $20K and that is ONLY if everything goes perfectly right. Well, this is real estate and if there is one thing I know, I know it always takes longer and the checks are always less than what I expect.

I understand your goal is buy and hold and if you live there and it works for you great. Job well done. Reality is, turnkey rentals are a pile of BS. I can think of no situation where they make any sense whatsoever. It is high risk, low reward and provides zero experience points.

If someone reading this lives California, you should invest in California. It absolutely makes ZERO sense to buy turnkey properties east of the Rockie Mts when SO MUCH opportunity can be found in any town around here from Newport Beach to Desert Hot Springs. From Chula Vista to Redding. Heck, if I lived somewhere else, I'd still invest in California. If you can't figure out why, get on a plane and come visit. It is literally the Truman Show here.