The Big One

[Ronnie Carney]

Just curious as to whether investors buying multiple units in Memphis ever worry about earthquakes?  I always hear that we are long overdue for another big one. (think 1865).

How do you protect yourself if an earthquake leveled the city?

[Douglas Skipworth]

@Ronnie Carney,

That's an awesome question!

As a local real estate investor, I only worry about two things happening in Memphis (on a macro level).

1. A major earthquake

2. FedEx leaving town

Thankfully, FedEx is heavily invested in Memphis and has no plans to reduce its footprint here.

As far as the earthquake goes, here are the 4 most common responses from our investor clients.

1. Several of our investors purchase earthquake insurance to protect themselves from the big one.

2. Many of our clients just roll the dice and hope that the next major quake doesn't happen until they are dead and gone.

3. A good portion of our clients diversify their portfolio geographically across the greater Memphis area so that an earthquake wouldn't take out all of their houses at once.  (For better or worse, this is the camp I am in.)

4. Some of our owners (who are using local banks for leverage) say that if an earthquake hits Memphis and all of their houses are damaged, it means many other things in Memphis will be destroyed, too, which will be a bigger issue for the city and the banks.

I understand where all 4 viewpoints are coming from, I just #2 proves to be the only one that is applicable!