All Forum Posts by: Forest Skufca

@Nick Moore Congrats on you and your wife taking your first steps to invest in real estate! There's so much that could be shared about this deal, and so many different points of view. So, please don't look at mine as the whole picture. It sounds like you have already done a lot of research on the deal yourself, so you are on the right track!

Being in Memphis, I'm familiar with the area and Crosstown Concourse. What I see with this deal is the value of the home you would be buying it at and the ARV you hope to achieve when the rehab is finished. As you know, Memphis is very "pocketed". A house on one street could be valued at 150k while an identical house one street over comes in at half that.

Looking at this street, I see boarded-up windows, a 4-plex not in the best shape, and recently sold comps on a few streets around only reaching 130k for newer builds in the 2000s. You're right that Crosstown could impact the value of that property, and you could do the work to it in the hopes that it pans out, but that just seems like a stretch and a lot of capital tied up into the property. Which is probably why it's still on the market. If you were able to get it at 60 or 50k, the deal would be much better. Plus, until you have a contractor come out and estimate the work and get it appraised, you really don't know the rehab costs or the ARV - so that could also impact the desire to purchase.

So, will it rent? You're all in for $142,000 (purchase price, $2500 closing costs, and rehab). And I see rentals in the immediate area getting up into the 1300s for a newer build and gated entry. So, it would be tight, but it's possible that it's a decent enough deal. I think the issue is that it's AT fair market value and not wholesale or steeply discounted. You would be buying it for what it's worth rather than 80 cents on the dollar. I do see the interest with its proximity to Crosstown, but it's a gamble on how long it will take for the surrounding areas to be impacted by that development and you would want to be sure you don't lose money waiting on the appreciation that may or may not happen. And for the BRRRR method, most lenders will want to see it rented for about 6 months before you could refi.

Again, a ton of thoughts, and I'm sure there are other factors. You are on the right track by running the numbers and analyzing the deal. Keep hunting! There are tons of deals out there!

Let me know if you have any other questions. I'd love to connect!

@Luis Velez Ali had the same question I did. If you are looking to put 50k down on a house and finance the remainder, you can get a great property, or two, off of 50k that is a managed turnkey property.

I would also take some time to research your turnkey providers. Interview several to find the one that achieves your goals. I would also recommend choosing one that offers a rent and maintenance guarantee so you can have some peace of mind when investing out of state.

@Abdul Azeez I'm glad you were able to have a good conversation with Mr. Reedy. That shows integrity on their part to ensure you have a better experience going forward.

Out of curiosity, do you know if they offer any sort of rental/maintenance guarantee? If so, that will at least make the wait a bit easier for you.

I also agree with Herndon. They are your properties, so you have the freedom to go and check on them when you wish. If it makes you more comfortable about the current situation and restores your confidence in the pm company then it's a win for everyone.