All Forum Posts by: Greg Gaudet

@Tom R. I heard about what could be a good solution to lost rent due to evictions (and possibly just damages beyond the sec. dep., I'm not sure if that's covered or not) on The Best Ever Real Estate Investing podcast with Joe Fairless; Sky Miksell, Joe's guest, owns a company called Nationwide Rentsure - https://www.nationwiderentsure.com/ - that offers rental income insurance... 

Pricing is $528 a year for a property that rents from 600-900/month, so $44 a month. They pay your rent for up to 3 months I think while they are evicting a tenant for you and 3 months after ward while you have the unit cleaned and marketed to re-rent and they handle the eviction for you as well. I don't know if this covers expenses for tenants that moved out on good terms but left damages beyond the cost of the deposit, but maybe they cover those circumstances too, you'd have to call and check with them. Anyway, I found it interesting and thought you might also due to the nature of your question; 

I'd definitely consider using them if I had any concern about the quality of my tenant or the possibility of having to evict at any time. It's episode JF1113 if you're interested in hearing about it. Hope this is helpful.

Mahalo Alex. After doing more research the past few days, and getting more feedback from folks like you, I have decided to aim more towards the 50-100k range probably in Memphis. Like you said, I'm thinking of doing something in the 65k range with top to bottom rehab so that I don't have to worry about capex and maintenance costs as much. I'm thinking that if I have a top to bottom renovation with everything down to new roof, plumbing, and electrical, I can safely assume %5 for capex, maintenance, and vacancy each instead of 10% each. 

Thank you for your input!

Thank you so much for the detailed breakdown and for sharing this with us. I'm also considering MSHB and I think my biggest concern is overpaying on the purchase price and losing money if/when I choose to sell. Did your properties appraise, and could you tell me how the appraised value compared to MSHB's "investor's price"? 

Do you have any concern about this? I'm even a little nervous about getting my money back even if it does appraise, because I've seen so many homes on MLS in Memphis with astronomical days on market; that makes me wonder if you need to price a home below market value in order to move it...

Mark have you, or anyone else on this thread, sold any of your homes in Memphis and have some light to shine on this?

Thank you everyone for your input. Daniel that is a good point that I haven't really been giving enough weight to in my factoring. Although I have seen a few properties with long term tenants in place, and just to clarify I wasn't looking at fixer uppers; the listings I had considered in the 30-40k range were move in ready and most of them already had tenants in place, just not newly renovated. But the quality of tenant may be a big factor that hurts my monthly cash flow. 

To get into the 70k range I'll have to either save for another 6-8 months or finance part of the purchase price. However I'd really prefer to pay cash so that I'm not hurting paying a mortgage on any months that my property is vacant. 

Does everyone out there finance their investment properties or wait until you can pay cash? 

Hi All,

Like many others, I have been doing research preparing to begin my first REI with a SFH in Memphis, TN (because properties here on Maui are too expensive for regular guys with regular salaries like me!) I've been fascinated with REI since I became an appraiser out of high school in 2002 and have been dying to get started since, but always convinced myself I didn't have the capital to do it. Well now I have a little bit of savings after working hard and saving like crazy for a LONG time and I've decided to buy a home cash in Memphis so that I have less risk (vacancies, HOA fees, mortgage payments, etc. all scare me, being a newbie, so I see this as the lowest risk way to get started because even if the home sits vacant for a year I would only have to pay taxes and insurance).

I'm currently comparing buying a home for around $30,000 that has not really been renovated and rents for around $600 VS. a home for around $65,000 that has top to bottom renovations and rents for around $750 ( possibly through a REI company like Mid South Home Buyers, Memphis Invest, etc., or just finding one on my own through an agent). Obviously I would expect higher maintenance costs; but let's figure instead of an average of $30 a month on maintenance I may have to spend $90 or even if it was $120 a month on maintenance, I still see the $30,000 house as a better ROI... am I missing something?

I'm also curious if anyone with experience in multiple markets has any suggestions as to whether another market might be best for my situation and trying to start off with the smallest possible out of pocket investment? I only happen to be looking at Memphis because another investor suggested it and I can afford to buy a home cash (not a renovated one though!)

Hope my questions don't sound dumb, but I gotta start somewhere, right?? Thank you all in anticipation for your feedback!

Thank you for your input Alex. I've been looking into the Memphis market, only because the market I live in is way too expensive. Would you mind sharing which of the 3 markets you mentioned (Memphis, Little Rock, and Knoxville) would be best, in your opinion, for a beginning investor looking to start off with a SFH REI in the $30-50,000 range?

Unbelievable. It leads me to think they must have been in alcohol/addiction recovery and gone through a nasty relapse or something like that, to go from normal tenants for 6 years to destroying everything and not caring

It's so sad to see how some people have no respect for other people's property and how hard you worked to have these properties.

Great info on this thread, thank you to the OP and all the responses. 

Living on the island of Maui, getting my first couple of deals under my belt has been a decade in the making... values are high, and when they were low I hadn't saved enough to get started yet. I have a few offers out right now for buy and hold condo units in the one building on Maui that is priced for beginners/average Joes, so we'll see what happens! However this building is a good investment so I'm not the only guy making offers there, but I am the only one making offers with financing contingencies. 

I have considered going out of state but that's definitely scary, especially because the next closest market is a 5.5 hour flight from here (California!)