My first deal with Memphis Invest/REI Nation

[Gabriel Rodriguez]

I've been lurking on Bigger Pockets for a while, but I have not posted until today. I figured I would start by posting a breakdown of my first real estate deal through a turnkey provider, REI Nation.

I purchased this property in the Memphis area in March 2019. The property is a 4BR/2.5Ba located in a suburb of Memphis. It is in a solid class B neighborhood, and was fully rehabbed by REI Nation at the time of my purchase. My purchase price was $169,900. The property had just been rented on a two-year lease for $1295 in year 1 and $1345 in year 2 ($1325 average). Here are the numbers:

Purchase price: $169,900

Down Payment 25%: $42,475

Closing costs: $4875

Gross Rent: $1325 monthly

Expenses (monthly):
Vacancy (4%): $53
Property taxes: $160
Insurance: $51
HOA: $21
Maint/Repairs (4%): $53
CapEx (5%): $66
Property Management (10%) $133
Lease-up fee (1 month rent with turnover estimated every 24 months): $55

Total Expenses: $592

NOI: $1325-592= $733

P/I: $127,425 x 5.125% = $694

Cap Rate: ($733 x 12)/($42,475+$4875)= 5.2%

Cash Flow: $733-$694 = $39

CoC return: $468/$47,350 = 1%

My numbers are more conservative than the ones REI nation provided. Obviously, the overall numbers are not stellar. However, my goal was just to get started. I also wanted a passive low-risk investment. After reading a lot about REI Nation (Memphis Invest at the time of my purchase), they had a great reputation but were on the pricier side of turnkey investments. That was okay with me at the time.

My experience with REI nation as a company has been great. My investment (I actually own 2 properties with them now) has been very passive. I get a phone call follow-up from their customer service representative every month. I have not had any vacancy so far, and I have not had any missed payments. Only a couple of maintenance issues have come up which were handled without my involvement.

My only real "complaint" about this process is that because it was so truly hands-off, I didn't really learn much about real estate in my first deal. That is clearly by design as REI Nation is geared to be a passive investment. However, I am looking to be more hands-on on future investments as I have been educating myself with books, podcasts and the BP forums. My goal is to move forward with a BRRRR investment in the Memphis area over the next 6 months or so.

[Joe Maris]

Now that this review is a year old, I'm wondering if you would mind updating with actual financials (cash flow, etc.). Also, now that you've worked with REI Nation longer, please update your review of how the property is doing compared to how they sold it (e.g , did they oversell the performance, is it performing as they claimed, how is your working relationship going, would you buy from them again, etc ?). Of course we're all interested in how you're doing as an investor and if you're getting closer to your goals. TIA.