All Forum Posts by: David Cook

@Bryan L. Lambuth did close, I was actually a part of the last graduating class.  However, it was immediately acquired by the University of Memphis and they have drastically improved the campus and expanded the student base.  Between the improvements that U of M Lambuth has made, the expansion of West Tennessee Healthcare, and the redevelopments going on in downtown Jackson I think SW Jackson will look quite a bit different in 10 to 15 years.  Of course that's just my opinion.

@Jeff Heflin  Some students do live off campus though quite a few of them seem to gravitate toward some of the apartment complexes in the area, especially Cherry Grove.  I see more graduate students and administrative staff in the hoses I manage though I have had undergraduates in the past.  If you wanted to invest in student housing I might suggest the neighborhoods around U of M Lambuth, That school is expanding fairly rapidly. 

@Dean Letfus What would you like to know specifically? Medina is kind of the Collierville of Jackson though not quite as upper middle class as middle class.  It's technically a separate town but everyone there works and shops in Jackson.  Good schools, low crime and a very short commute to Jackson.  It can be a bit tougher to find deals there than in Jackson simply because it is a smaller community so stock is lower to begin with and obviously it's a generally attractive community to live in.  I also work for a lawn care company so I do a lot of driving in residential neighborhoods as well as door to door sales.  From my interactions I'd say that a lot of the people who live there are younger couples, have young children, and work in healthcare.  You might also take a look at Milan, TN for similar reasons, although you are getting farther and farther into areas I'd describe as rural in that direction.  What else would you like to know?

@Bryan L. I don't know about any areas that are necessarily "war zones" but you can definitely find neighborhoods and streets where I would never personally buy.  some areas of South East Jackson are almost exclusively rentals and do have higher crime and poverty rates.  With that being said their are nice streets and successful investors who deal in those areas.  Like Memphis Jackson gets bad press:

http://www.movoto.com/blog/top-ten/dangerous-small...

While I personally feel that any "most dangerous" list article paints in broad strokes I can understand why out of town investors would take their money elsewhere.  You might also take a look at Medina Tennessee and Dyersburg Tennessee if you like smaller towns.  While Jackson is technically a town of less than 100,000 the population during the day is probably a little higher than that since most other small towns in north west Tennessee come here during the day to work or shop.  However, they choose to live in places like Medina because of the schools and a perception that crime is lower.

I think it's safe to say that Memphis will generally have better ratios in terms of cost to rent. That's not to say there aren't deals to be made here.  The rents (with exceptions) tend to be higher the farther north and the farther west you go. I manage properties in North Jackson but I hope to start my own portfolio in the Lambuth/hospital area. I'd be happy to talk to anyone about specific parts of town if they are interested.  It's nice to see my own neck of the woods mentioned on BP.

@Sam H. I'm in Jackson, Tennessee so mine won't be the most accurate insight on the subject although our market tends to mirror that of Memphis to some extent as we are only about an hours drive East of where you are investing.  Jackson also struggles and benefits from many of the same forces that make Memphis an appealing investor market.  In my own market I'm noticing a drop in what I would consider B- to B stock.  The really low end and the really high end seems to me to be about the same as it was a year ago.  It's still pretty easy to find homes for 15k if you are comfortable putting in the needed TLC and managing the tenants that will occupy those homes or in the 90-110k range that makes up the median high end of our rental market.  

I only browse the Memphis listings maybe once every two weeks out of curiosity.  I still see what I would consider fair deals every time I look. Though, I can't say if they are in greater or shorter supply than this time last year as it's not my market.  I grew up in the Memphis area so I tend to only look at the midtown/uptown areas since that's where I lived/worked when I was a Memphian.  Hope that helps.

Thank you @Elizabeth Colegrove 

I really appreciate the insights.  As you said Troy this one may not work out but at least I will have a better game plan in place as a result of this discussion.  I will update this forum on if the deal ends up going through.

@Tou V. and @Jeff B. 

I greatly appreciate the thoughtful insights.  I am leaning toward doing my own PM at the moment.  My initial offer with the seller was countered at a price I consider too high (he came down 1% off asking price).  I suspect the seller is either over leveraged or just testing the water since his price is about 10-15% over comps.  It may be that I have to look elsewhere for my first investment but the advice you have given me will aid me in the future.  Thank you both very much.

I've seen landlords try this approach in my city and in some cases they have ended up in court over code violations.  One neighborhood association in my area is even considering suing a couple of the larger slumlords.  In general I think we should treat people how we would want to be treated.  If we can't do that and make money then we should perhaps pursue another real estate or investment niche.  I also think it's an investment in the future of our business.  Tenant friendly laws wouldn't exist or would be less egregious if the Donald Sterlings of the world weren't allowing their tenants to live in standing water.   

Hello BP,

I'm looking at finally taking the plunge and buying my first property.  It's a quad with tenants in place and it should provide cash flow even if I am occupying one unit free of charge.  My question is this:  Should I manage the property myself setting aside the extra money I receive from management to jump start my investing career?  Or, alternatively, should I hire a professional management company for peace of mind and a more harmonious living arrangement?  

I've managed my father's portfolio for over a year now and I'm confident in my ability to advertise the property and screen tenants.  I also don't mind rolling up my sleeves to do basic repairs, repaint units between tenants, etc.  However, I am concerned that this property is in a niche that I am unfamiliar with.  All the properties I have managed thus far are relatively upscale single family homes attracting a tenant that makes a bit more money than I do, sometimes a lot more money.  This will not be the case with this quad.  In addition I am required to travel for work on occasion and it would be nice to have someone who I could count on to step in if something did happen.  There is also a peace of mind factor, I want the place I live to be as relaxing as possible, not someplace where my immediate neighbors feel they need to dodge or confront me because they are late on rent.   

I welcome any and all input, thanks for reading!