All Forum Posts by: Marc Marquez

Hello @Marc Marquez

I hope you are doing well. 

I work here in the city of Memphis, and I have never heard of the homebuilder company that you are speaking of. The price and the rent that they have placed on the property do seem very high to me, and I believe they will have a hard time with comparable sales in the area, and also a hard time finding a tenant that will want to pay that price in Frayser. 

I would be more than happy to connect with you and help answer any other questions you have about the Memphis market. 

I haven't purchased my investments through them. But I have bought turnkey before and I can say that you get what you pay for. While the price point is usually a sticking point, you also pay for peace of mind knowing that things are in new(er) condition. So it's up to you what you're comfortable with. 

I have invested in Memphis before and it was a great experience for me. Good luck and happy hunting! 

@Marc Marquez

just curious, why not invest closer to home?

@Marc Marquez, I’m an investor in Memphis who buys turnkey. While the offerings are plentiful, I won’t buy anything in 38127.  Automatic no for me.  I’ve driven through 38127 personally a couple of times over the years.  It may be a tad better than it used to be but definitely not an area I like.  

There’s a podcast that @Dean Harris and Douglas Skipworth do and have a few episodes on Memphis zipcodes.  Their opinions generally seem to be spot on with my experience in driving these zipcodes. Check it out. 

Might as well invest in Killeen. 

Quote from @Marc Marquez:

Quote from @Charley Gates:

Hi Marc,

You ask great questions and I'm happy to share my thoughts.

I am not familiar with the Memphis market.  I invest in Pittsburgh, PA, and in Atlanta, GA.  

I have also looked at turnkey single family homes in other states, but have never pulled the trigger.  I felt that the turnkey homes that I looked at did not have enough equity at the listed price.  In other words, there was not a lot of meat left on the bone.  It is so critical in real estate to buy well. 

I wish you luck in your investment journey!

Very true on your points, but I’ve read several different opinions on this very issue, especially if the equity is a wash with the investment itself, especially initially. The goal is that the equity will get there and build over time eventually, but one would have to hold onto the property itself for a bit longer and thus have the benefit of the higher cash income to offset this over the time it takes to build the equity.

I also learned that it may make more sense to invest some money yourself in the beginning to create some equity as well at the time of the purchase so in the event of a backwards market period, one is not upside down at any point in time.

Good points.
I would say that there is a hierarchy of deals.   The best deals have instant equity, but these are hard to find.  A deal can still be good without instant equity.  
Also, the issue of instant equity becomes less important if the property cash flows after all expenses including debt service and capital budgeting.
Positive cash flow also protects you in a market downturn since you less likely to fall under pressure to pursue a major capital event (sale, refinance, etc) in a challenging market. 

Hi Marc,

You ask great questions and I'm happy to share my thoughts.

I am not familiar with the Memphis market.  I invest in Pittsburgh, PA, and in Atlanta, GA.  

I have also looked at turnkey single family homes in other states, but have never pulled the trigger.  I felt that the turnkey homes that I looked at did not have enough equity at the listed price.  In other words, there was not a lot of meat left on the bone.  It is so critical in real estate to buy well. 

I wish you luck in your investment journey!

@Marc Marquez,

Welcome to BP!  I'm in the Memphis market and have been in the property management and turnkey investment industry for the past two decades - before it was called turkey.  I'm going to give you some generic advice, but also have a couple of questions before completely giving my advice.

1.  Be patient and go slow.   Great job asking questions.  Nothing wrong with that.  However, have you googled your own research on the area you are asking about and the houses you are looking to buy?  No matter what answers you get on here, ultimately, you are responsible for that final decision.  There is no need to rush.  

2.  You need to meet the people you will be doing business with at a minimum if you are not going to see the actual houses.  You are looking to invest roughly 600 miles away from where you live.  Not an easy drive, but a quick flight on Southwest or United up to Memphis.  You need to find out if the eye test meets the hype.  We may not know a lot of specific data about areas, but I believe our eyes can tell us if the investment makes sense.

Ive never heard of the home builder your talking about but there was some news about them a while back building affordable homes in Frayser for $110,000 to $120,000.  That was already 50% more than the average historical home price in the area and seemed absurdly high at the time.  For reference sake, where are you seeing these offers?  I don't even see a website.  Is this something you are being offered through a Turnkey promoter?  Lastly, who would manage your investment?

These are typically referred to as "Build to Rent", so you might want to search BP for that term.