All Forum Posts by: Jack B.

Background. I have 3 houses already (two rentals) and am looking to buy 2 more rentals. I want to buy these with 25% down. One of my rentals is paid off and the other is mortgaged and I like the CoC return of that better, frees up money to invest, but having one paid off house is good for peace of mind too.

Option 1:

2 bed, 1 bath, just under 800 square feet. One car garage. 

There are three apartment complexes right across from this, but it is a block away from a really nice/new elementary school. Area is a bit higher crime according to Trulia. Turnkey, 107K

Option 2:

3 bed, 1 bath, just over 900 square feet. Carport instead of garage. Much better neighborhood, literally down the street 2 minutes to one of the base gates for the Air Force gates. Metal roof. Needs new appliances and flooring in the kitchen, but has new paint and carpet as well as water heater from bank. This is a foreclosure. Might be a little higher priced and need 3k of appliances and flooring, but it is also newer, larger, THREE bedrooms, and in a better area., and at the end of a dead end street to boot, 113K

I am investing for cash flow. Note that Option 1 is supposed to appreciate 10% while Option 2 is about 6%.

I just feel that the location, location, location of Option 2 is sooo much better, and the house is 17 years newer, and man I can't tell you how much the location is better than the other house. I mean it ain't Beverly Hills, but I wouldn't be afraid to walk down the street day or night.

 What kind of rents? With the 60K range it could still be a better deal than my area, but in the 90k to 150K range it's not as good a deal. I looked at some of the properties on Memphis Invest which seems to be highly regarded, and the rents were low compared to the price IMO. I could get a similar house for equal or better price/rent ratio in a local market where I can self manage and there is a good economy (military/tech/Boeing).

Plus appreciation in my area has been higher than Memphis. One of my properties went up 22% last year, the other 13%. Not going to be like that every year of course, but it is something I consider a nice bonus/a factor to consider. So far it sounds like Memphis is not what it looks like on paper.

I would be willing to buy homes 50-75K in Memphis. I've found some threads on zip codes to avoid, but could get more from here and City Data.

Hello,

I've been a RE investor for 4 years. I own three houses (two rentals and my primary residence) with a fourth under contract. I was looking to buy 2 more rentals until I saw the add on this site for Memphisbuyandhold.

The cash on cash returns are far higher, and with the cash I have on hand, I could finance 10 or more of these rentals (using a portfolio lender) with 30-50% CoC return. Heck, I could cash out of my other properties and buy 30 of these. Here in the Seattle area property is very expensive and the rents are not that great. It was largely paying cash, buying right, or timing/financing that made my rentals profitable, depending on the rental.

So even on a financed property, I am looking at the same cash flow on a Memphis house, for a fraction of the down payment on a house here. It also seems they have a tile attorney, and property manager built in, so it literally seems turnkey, some of the houses are already rented even. I have not been able to find anything bad about the company after a cursory search online so far, but wanted to see what everyone here thinks.

I could finance 10 properties in Memphis for what the DP on three cheaper greater Seattle area houses DP's are, with the same cash flow for each Memphis property as each Seattle property, and 2-3 times the CoC returns. Heck, I could pay cash for a Memphis house for what the DP on a greater Seattle area house is here. My only concerns are, I have no knowledge of this company, Memphis, or buying out of state real estate.