All Forum Posts by: Alexander Price

@Alex Craig As always, the colorful metaphors.

@Dean H. I walked who knows how many properties during my recent visit. The rehabbed ones I saw ranged from good to top notch. I cannot say I saw any bad ones, but I was also working with two specific vendors. So to Alex's point, its about management. 

Good luck!

I really think this is awesome how there are so many great testimonials. This is why BP is valuable. 

@Henry Tse Memphis has some areas that are really investor heavy and others that might have retail opportunities. If you plan on buying and holding you will do alright if it is bought right, managed well and held for a long term i.e greater than 5 years. I have not hit this time frame yet, nor am I close nor am I an expert on Memphis. 

My two buys out there are long term holds and in heavy investor markets, so if I wanted to sell them, it would be hard to sell retail. I would have to sell to another investor. That can put a hamper on what you can sell your property for if you need to get out. I don't need to or want to get out so I am ok at the moment. I did recently visit Memphis and met with many players out there who helped me learn more and identify areas where there are potentials for a retail option out of the investment. 

Talk about exit strategies with whoever you work with.

Also, a point I see hammered on here all the time for us out of state folks is management. Find the people who communicate well and work for you and with you. @Alex Craig can probably help you here. He is highly recommended by many.

Hope this helps. 

@Henry Tse

If you're serious about Memphis, go out and visit. There are many opportunities. Just understand it is a heavy investor market and the exit side will be different because of it. Also, @Alex Craig has a wealth of knowledge of the place, regardless how you want to invest out there. 

@Jay Hinrichs  

@Ben Leybovich

You both make fair points. 

@Mark S.

One thing to ask when looking to buy, is if there is a retail market for the neighborhood. Ask for OO comps in the area, and not just one. @Ben Leybovich had previously stated to underwrite your buy using an IRR. When you do this, assume you sell for what you bought it and check the return.

So far so well. They are good people. I have had good responses. If you give them notice, they will usually set aside time to talk to you within a few days. They respond to e-mails usually same day. They have taken time to review statements with me when I have questions. They are open with information.

The property you are referring to is fine.  I got in with a tenant who only had a 1-year lease, which most people would advise against, as do I. R2R does not do 1-year leases anymore. However, recognizing my tenant may not renew after her year was up, they got a double security deposit up front to mitigate turnover costs. The rehabs on the homes are really well done. Also, they tend to have better pricing and still be fairly negotiable. 

If you want hard numbers, my returns are probably not normal as it is first year. For the first 6 months, since I have those numbers handy, the COC return is 8.2%. Extrapolated out, one could assume 16% COC for the year. That is the part I do not believe to be real. I expect it to be more around ~12% COC. These numbers include all inspection fees, closing costs and my travel. This accounts for debt service and PM costs. I have not had repairs yet, but I saw the house after the tenant left. Only cosmetic maintenance was needed.

@George T.

I would think location will make the decision for you. Memphis has some neighborhoods that support the retail market. Others are going to be mostly investor owned properties. Reach out to a realtor for comps in the area and see what they suggest. @Curt Davis can probably chime in here. 

@Abdul Azeez

Beautiful home. I was trying to rent a rooms on Craigslist one time and the dropping the price $50/month got me more hits in one day than I had the previous week. Granted it wasn't TN. I would listen to @Curt Davis and @Stephen Akindona and consider even a nominal price drop. For renters, $20.00 is a lot sometimes. 

@Fred Johnson

I know you did not ask me, but MFRs in Memphis have to be chosen very specifically. Many look really good on paper, but will not pan out due to neighborhood or type of tenant.

@Diane G.

Thank you for asking. So far so well.