All Forum Posts by: Daniel Weaver

There are a lot of properties for sale right now in Memphis and my hypothesis is that sellers realized they are going to miss the top of the market if they wait any longer. Suddenly many owners wanted to sell - but since interest rates have gone up and the economy is a bit unsure buyers and sellers have a different opinion on what the houses should be worth right now. So houses are sitting on the market a little longer.

As a born and raised Memphian, I would agree with the other comments that Memphis can be a great place to invest if you have good boots on the ground. Memphis can be tricky for out of state investors because of street by street differences and difficulties finding good tenants, especially at lower price points.

As far as socioeconomic factors, Memphis has a lot of transportation industry businesses which provide solid blue collar work, and much of this stayed open as essential even during the pandemic. There is also a huge electric vehicle manufacturing plant under development just NE of town. So we have a pretty solid economy, but the average income is probably a lot lower than other cities with a different industry focus.

Hi Brian - best wishes for a successful purchase. Are you also local to Memphis?

Agree with Sam's points, but also communities with easy access to I40 on the North East side of Memphis could benefit as well. Lakeland and Arlington are already nice communities and the commute to the plant site would be reasonable and allow executives and managers to live within easy distance to city amenities. For rank and file workers, it's possible that Brownsville,TN on the other side of the mega site would benefit more than Memphis.

Though I'm biased of course, my Dad has been a CPA for over 20 years and recently went out on his own. Has catered to real estate investors, being a real estate investor himself:

Matt Weaver, CPA

 Hi Nick - sent you an email to get a little more clarity on what you are trying to find. Not sure how you would classify "stable", but is there a price point you are looking at? Do you mean A class, or by stable do you mean a neighborhood not moving up or down in class?

Welcome! As you probably already know, there are often good and bad areas mixed quite closely together so it can be hard to recommend a certain area to a new investor. If you want to flip, I would focus on the worst house on a nice street to try and get enough room for improvement. If you want to buy-and-hold, then look for cheaper houses on the edge of a stable neighborhood.

His website is https://mattweavercpa.com/

My Dad, Matt Weaver, is a CPA who lives, works and invests in rentals in Memphis. He has a number of real estate investors as clients. Not sure if a link to his website is allowed here but it should be quick to Google.

Search for Memphis Investors Group.

Typically they meet in person but this year, for obvious reasons, a lot of their meetings moved online.

@Chris Clothier and @Timothy Lewis have already told things straight, so this is mostly just seconding their opinions. Though the list of good areas may have changed slightly since @Timothy Lewis says he put it together, it is largely still true. I would say that some of the fringes of the good areas mentioned are seeing a lot of investor activity as prices rise and people try to squeeze the margins. For instance, the area of 38117 south of Quince is seeing a lot of flipping activity this year. 

At the moment, I've been effectively priced out of the University District area where I have been investing, because I'm not convinced the higher rental rates used by other investors' calculations are going to hold up without significant risk of high vacancy costs. Out of town investors don't realize how long a unit might sit vacant before getting the "market rate" rent, but these vacancy costs could eat up all your proforma returns easily. I prefer to rent slightly below market rates to reduce vacancy costs, but then I need to get a better deal on the purchase price to hit my cash flow numbers.