Great write-up sir!
I wonder how many would be turned off of TK by your post.
3 months of vacancy in Summer?
Pro forma not exactly accurate....................lol.
Originally posted by @Clinton Davis:
I'm no expert but I have lived in the Memphis area for 15 yrs and not to discourage you but ~$950/mo in the Hickory Hill area is pretty high. I'm guessing thats why it's been sitting empty so far. Over the last 10 plus yrs Hickory Hill has been in decline. There's just too much riff raff. Schools are terrible in most of Memphis due to mismanagement of funds and just a lack thereof due to corrupt govt officials. If you have money, your kid goes to private school. Or Most people (the kind you wanna rent to) are moving to the suburbs like Collierville, Germantown, Lakeland, Bartlett. North Mississippi (Southaven, Olive Branch).
I have been using the company below, recommended by another well know BP podcaster. I have a checkbook IRA, so I do not have many transactions, but they do charge by the transaction.
You can google them.
Memphis Investment Properties Turnkey Case Study
Disclaimer: I am an investor/customer of M.I.P, I do not work for them nor being compensated in anyway, just sharing my experiences with other investors.
Providers Involved:
Norada Real Estate Investments
Memphis Investment Properties (M.I.P)
Reedy and Company Realtor, LLC – Real Estate Broker and Property Management for M.I.P
Bemortgage – Lender
Lipscomb – Insurance
The Prep:
My Criteria/Situation:
The Purchase:
During the M.I.P Property tour in May, they handed out flyers with properties for sale reserved for visitors that weekend. I put down $3K deposit on a house during the first day of the tour.
Below is the Performa and the initial picture of the house. Additional pictures, comps, and a list of renovations were provided, no costs, just items they would do. We had seen a similar house on the tours. M.I.P is willing to replace HVAC’s, roofs, windows, etc. when needed, but they will minimize the renovations based on the age of major items, etc.
This house needed a new HVAC/condenser, but the roof and floors were in average condition.
This house was set to be empty June 30, and close August 45 days later, this did not happen as planned.
Timeline of events:
Closing:
Post-Closing:
Some Observations:
| Proforma Estimate | Actual | Notes | |
| Closing Costs | $2854 | $4086 | %43 higher than the estimate |
| Pre-Pays | $0 | $734 | I was told that M.I.P does not try to estimate pre-pays |
| Interest Rate | 5.25% | 5.375% | I put 25% down, the delay in closing caused me to obtain a higher interest rate |
| Property Taxes | $97 | $97 | Spot on (2017 records) |
| Insurance | $40 | $52 | I used Lipscpomb, M.I.P .recommendation |
| Vacancy | 4% (14.6 days a year) | Since tenant vacated 26% (95 days) | Since my ownership 5% (21 of the 95 days) |
Overall Summary:
Overall, I would recommend Norada and M.I.P. My experience was not perfect, but most items come with the territory in my mind. You must do your due diligence and expect delays.
My major complaint was lack of proactive communication. I work in the I.T. field were daily, weekly communication is the key to working in a remote environment. I have come to expect that from anyone who is in partnership around my investments. I did express my disappointment many times in lack of communication and it improved a bit after closing. I do not hold any one individual at fault, I believe its part of the system, they are overly busy and have to multi-task quite a bit. I think they should be upfront that you might not hear from them for days or weeks sometimes.
I would be more than happy to talk to any investor about my first Turnkey investment. I will most likely do this again because I'm not an expert in BRRRR, Wholesaling, or Fix and Flips. I need consistent CoC, Tax relief, and mortgage pay down, etc.
Memphis Investment Properties Turnkey Case Study
Disclaimer: I am an investor/customer of M.I.P, I do not work for them nor being compensated in anyway, just sharing my experiences with other investors.
Providers Involved:
Norada Real Estate Investments
Memphis Investment Properties (M.I.P)
Reedy and Company Realtor, LLC – Real Estate Broker and Property Management for M.I.P
Bemortgage – Lender
Lipscomb – Insurance
The Prep:
My Criteria/Situation:
The Purchase:
During the M.I.P Property tour in May, they handed out flyers with properties for sale reserved for visitors that weekend. I put down $3K deposit on a house during the first day of the tour.
Below is the Performa and the initial picture of the house. Additional pictures, comps, and a list of renovations were provided, no costs, just items they would do. We had seen a similar house on the tours. M.I.P is willing to replace HVAC’s, roofs, windows, etc. when needed, but they will minimize the renovations based on the age of major items, etc.
This house needed a new HVAC/condenser, but the roof and floors were in average condition.
This house was set to be empty June 30, and close August 45 days later, this did not happen as planned.
Timeline of events:
Closing:
Post-Closing:
Some Observations:
| Proforma Estimate | Actual | Notes | |
| Closing Costs | $2854 | $4086 | %43 higher than the estimate |
| Pre-Pays | $0 | $734 | I was told that M.I.P does not try to estimate pre-pays |
| Interest Rate | 5.25% | 5.375% | I put 25% down, the delay in closing caused me to obtain a higher interest rate |
| Property Taxes | $97 | $97 | Spot on (2017 records) |
| Insurance | $40 | $52 | I used Lipscpomb, M.I.P .recommendation |
| Vacancy | 4% (14.6 days a year) | Since tenant vacated 26% (95 days) | Since my ownership 5% (21 of the 95 days) |
Overall Summary:
Overall, I would recommend Norada and M.I.P. My experience was not perfect, but most items come with the territory in my mind. You must do your due diligence and expect delays.
My major complaint was lack of proactive communication. I work in the I.T. field were daily, weekly communication is the key to working in a remote environment. I have come to expect that from anyone who is in partnership around my investments. I did express my disappointment many times in lack of communication and it improved a bit after closing. I do not hold any one individual at fault, I believe its part of the system, they are overly busy and have to multi-task quite a bit. I think they should be upfront that you might not hear from them for days or weeks sometimes.
I would be more than happy to talk to any investor about my first Turnkey investment. I will most likely do this again because I'm not an expert in BRRRR, Wholesaling, or Fix and Flips. I need consistent CoC, Tax relief, and mortgage pay down, etc.
Memphis Investment Properties Turnkey Case Study
Disclaimer: I am an investor/customer of M.I.P, I do not work for them nor being compensated in anyway, just sharing my experiences with other investors.
Providers Involved:
Norada Real Estate Investments
Memphis Investment Properties (M.I.P)
Reedy and Company Realtor, LLC – Real Estate Broker and Property Management for M.I.P
Bemortgage – Lender
Lipscomb – Insurance
The Prep:
My Criteria/Situation:
The Purchase:
During the M.I.P Property tour in May, they handed out flyers with properties for sale reserved for visitors that weekend. I put down $3K deposit on a house during the first day of the tour.
Below is the Performa and the initial picture of the house. Additional pictures, comps, and a list of renovations were provided, no costs, just items they would do. We had seen a similar house on the tours. M.I.P is willing to replace HVAC’s, roofs, windows, etc. when needed, but they will minimize the renovations based on the age of major items, etc.
This house needed a new HVAC/condenser, but the roof and floors were in average condition.
This house was set to be empty June 30, and close August 45 days later, this did not happen as planned.
Timeline of events:
Closing:
Post-Closing:
Some Observations:
| Proforma Estimate | Actual | Notes | |
| Closing Costs | $2854 | $4086 | %43 higher than the estimate |
| Pre-Pays | $0 | $734 | I was told that M.I.P does not try to estimate pre-pays |
| Interest Rate | 5.25% | 5.375% | I put 25% down, the delay in closing caused me to obtain a higher interest rate |
| Property Taxes | $97 | $97 | Spot on (2017 records) |
| Insurance | $40 | $52 | I used Lipscpomb, M.I.P .recommendation |
| Vacancy | 4% (14.6 days a year) | Since tenant vacated 26% (95 days) | Since my ownership 5% (21 of the 95 days) |
Overall Summary:
Overall, I would recommend Norada and M.I.P. My experience was not perfect, but most items come with the territory in my mind. You must do your due diligence and expect delays.
My major complaint was lack of proactive communication. I work in the I.T. field were daily, weekly communication is the key to working in a remote environment. I have come to expect that from anyone who is in partnership around my investments. I did express my disappointment many times in lack of communication and it improved a bit after closing. I do not hold any one individual at fault, I believe its part of the system, they are overly busy and have to multi-task quite a bit. I think they should be upfront that you might not hear from them for days or weeks sometimes.
I would be more than happy to talk to any investor about my first Turnkey investment. I will most likely do this again because I'm not an expert in BRRRR, Wholesaling, or Fix and Flips. I need consistent CoC, Tax relief, and mortgage pay down, etc.
UPDATE:
4205 Cedartree Drive is almost mine!
Jan 11:
Looking for to finalizing and obtaining a renter with the investment managed by M.I.P.
They just hosted a great tour of Memphis, Marco Santarelli from Norada was there, Aaron Chapman and many others, it was a great two days and they educated and feed us well. 33 Memphis properties were for sale, and investors including myself were scooping them up along the tour. They offer some rehabs and new build, you really should check them out, great folks.
I have had good luck with my-account-online, with @Daniel Hyman. Give him a shout, his team is very responsive.
https://www.biggerpockets.com/co/my-online-accountant-llc
@Rex Lindsey I agree, personally I don't like to buy anything under a 6% cap rate, it's just too hard to make money unless it's brand new or in near perfect shape and rents can be increased. Investors buying 5% cap rate properties are most likely banking on rental increases while taking appreciation losses on their taxes as well as mortgage interest. If you haven't already, look into cost segregation, it's a great way to save a lot on taxes for items that wear out faster than 28 years. I am going to continue buying as much real estate as I can while rates are low, as long as it's over a 5.5%-6% cap rate and is in great shape and in a great area. When there is a market correction I will be ready to buy more as well. I'm focusing on buying where there is population and job growth, i.e. the Lehi (South Salt Lake County and North Utah County), and I'm staying away from less stable but cheaper markets/cities. FIG just sold out its Herriman project, but still as openings in Boise and Houston.
Could you put me in touch with 2 clients, one that loves the FIG experience and is killing the projections, and maybe one that does not?