All Forum Posts by: David Hutson

@Mark Nishiguchi,

No, they are too busy to handle the sales.  They pass them off to an agent I work with.  He sells them and Mid South continues to manage them.  There's about 10-12 on the list available now.  I can send you the list if you message me.

Morning @John Laney and @Mark Nishiguchi,

Yes, there is a good market for Mid South Homebuyers homes for people who want their homes.  I currently have 12 homes of theirs with many bought from sellers who want to sell after owning them for a few years.  They often sell for a little less than the new price but the market here is a little unusual right now.  Prices have continued to go up and are fairly high right now but rents have been rising as well.  Some owners are pricing their homes to actually sell and there are some who are listing them at excessive pricing hoping someone will want their homes without the wait and pay a premium.  Most of those homes being sold now are either out of country investors trying to cash in on the appreciation or U.S. investors who want to get into bigger deals.  There have been a few that decided it's not for them.

@Andrew Spencer,

I find that the good homes go quick so if you see a home that has been available for awhile then look closer before putting in an offer.  The crime map on Trulia, like James mentioned, is a good start.  There is crime all over Memphis so find someone locally with experience in the areas you want to consider.  Many zip codes can be good but there are still issues within good zip codes.  When you find an area you want to invest in or have a possible home to purchase put that out here and ask again as you may get better answers when you can be more specific.

I'm here in Memphis with many rentals.  Unfortunately the numbers look pretty similar to what I see for myself and a lot of investors, maybe a little higher, depending on the size of the home.  The locks are what are always expensive and what I consider high.  It's usually due to the storm door locks.  They have what are called "Marks" locks on the doors and it's expensive to replace or rekey.  I have a quote today to replace one set at $250.  I'm ready to change out the storm doors to security doors between tenants since they use standard door knobs and I can replace the door and locks for less than $250 for just the lock.

@Brandon Mokris, 

Message me after your PCS and settle in or if you aren't moving for awhile reach out now. I moved here last year after I retired but I have been investing here for seven years. The local REIA, Memphis Investors Group, has over 400 members with several subgroups, including a multifamily meetup. Multifamily doesn't do as well as single family homes in this market. I was looking for the same but have stopped due to all the issues with maintaining the properties and tenant issues. The numbers often look good initially but over time tend to perform poorly. This is definitely a hands on market meaning those who invest in multifamily from out of town tend to lose a lot of money, but not all. There are more than a few properties people from out of town have syndicated that are going back to the banks.

@Johnathan Anderson,

Crestcore does have in house rehab teams.  I have used them for a rehab I purchased from a wholesaler.  It was completed on time and looked great.

@Mark S., @Nic S.,

I didn't buy them all directly from Mid South.  I am on the same waitlist as everyone else.  I was tired of waiting to be next on the list and now I search for their homes when the current owners decide to sell.  For the past few years sellers overseas have wanted to sell since prices are high or they want to do something different with the money, a few times sellers had a life changing event.

Some of the homes are a year or two since they bought them and sometimes it is after a tenant turn so the home was just updated.  There are homes that were rehabbed years ago and still have good tenants.  I plan to get at least 25 of their homes so waiting nine months in between purchases would take forever.  Figure out what you want and then find a way to get there.  

@Kenny Lundgren, 

Yes, you should still call them and verify they received the email.  We are assuming they did.  Unfortunately for Memphis, I have found that many of the property managers don't care when you take your property to another PM since they will get more to replace you.  Reach out, if they sound sincere then see what they will do to make up for your bad experience.  If it doesn't feel good in your gut then fire them and go on to the next.  I work with a dozen or so here and have fired several myself.  I'm sure I will fire more in the future.  It's not what I prefer but PMs will not always perform as good as they should.

@Kenny Lundgren

I would also call them and ask if they received the email and what their normal turnaround time is to respond to concerns.  There are many turnkey companies and property managers here in town so I would recommend you come out, meet with your company and meet with a few others and ask them all the same questions.  Reach out to people here on BP and ask for recommendations if you are not familiar with who to meet with and read their reviews.  If you think there is another company that is a better match then consider moving your properties.  I have done it a few times here and it's pretty easy.  With your comments so far I wouldn't consider working with the provider you are working with now unless they have a good reason for not responding to you, ie, the email was sent to an incorrect address and not received.

@Richie Thomas, 

So I have a few things to add to your calculator numbers.  First Mid South didn't sell that house for $76k.  They sold it to an investor in Dec 16 for $71k.  Another investor I know bought it a few months ago and Mid South still manages it.  Not sure if it was luck or what but I am familiar with the house.  The house looks nothing like the Realtor.com photo currently.  It was painted in their burnt red color and they cleaned up the property, added plants, etc.

As for the numbers, I believe the seller took care of all of the repairs noted on the home inspection before it was sold.  I'm guessing there was some wear and tear left but no significant repairs were needed to be done.  Vacancy is very high.  Use whatever number but I wouldn't go over 8%, like @David B. mentioned.  One of the reasons I like Mid South is they rent their homes for a little less than market rent and their homes are better renovated.  A tenant can't go down the street to find a cheaper home for rent and get the same quality.  I have only had four turnovers since I started investing with them about six years ago.  (That's where I'm making the money and their vacancy rate is under 4%.)  Insurance is high.  I pay around $500 a year for similar properties.  Taxes are also high.  The Misc is for what?  If you add that to all of your assumptions you won't make money on any property.  If you take out reasonable taxes, insurance, PM, repairs and vacancy with a turnkey out here you may make $150 on the proforma for a quality $75k property.

Also, when I started investing with them about six years ago I lived in Sacramento.  I moved here about six months ago and it does make it easier to invest here but it can be done from anywhere.  I never had issues being out of state but I do recommend you fly out and take a look around and meet with people here first.  Find the areas/parts of town you like.  Walking the neighborhoods and seeing the quality of work with any company you work with is a plus.

 @Chris Clothier also has properties that are similar in quality in different parts of town and price range. The Clothier family a great company and is well known. MemphisInvest.com, soon to be REI Nation, if you want to look at options.