All Forum Posts by: Michelle Crochet

Great investment opportunity in Memphis, TN. My investment firm is an equity holder in it. We are selling so we can redirect funds to other opportunities, but it’s a great property.

Details:

Asking price $880k (offering a $10k credit to seller at closing for a full price offer)
9 units; 8 rented at market rate; 1 delivered vacant.
Just recently renovated to rental grade approx $40k+ spent
Fantastic property mgmt company, so very passive income.
Current monthly rental income (including pro forma on single vacant unit) is $7930/mo.
Cap rate 8%
A-/B+ neighborhood in Memphis adjacent to A neighborhood…very good for low headache and future rent growth. Very nice, safe street with mostly SFR (not MF) on it.
For just a few days we are offering this off-market to our network before listing it.
Memphis has bad PR but it’s a cool city with great industry and tourism and lots of growth happening (Chase bank is in the process of opening 14 locations in Memphis, as one data point of growth worth sharing)
Lmk if interested in more info. Thx!

Hi Keith! Starting out in real estate is exciting but it's totally normal to feel a bit apprehensive about taking on debt. Here are some things I usually tell people: 

Leverage can be your friend- Debt can actually help you grow your portfolio faster and boost your returns in the long run. Focus on cash flow: Make sure the rental income from your properties covers all your expenses, including mortgage payments. Positive cash flow is key!! Diversify your investments: Don't put all your eggs in one basket. Spread your investments across different property types and locations to reduce risk. Think long-term: Real estate investing is like a marathon, not a sprint. Take a step back and focus on building a solid, sustainable business over time.

It's totally okay to feel a bit nervous, but with some smart planning and informed decisions, you can definitely make your real estate dreams come true :) Good luck, Keith!

Hey Jack- Welcome to BP! It's great that you're considering investing at such a young age. The move from Pasadena to Missouri sounds like quite a change, and I get that you miss the CA vibe. Regarding your question about house hacking in Missouri versus exploring other options: it's a big decision. The duplex idea might not excite you location-wise, but financially, it could be a solid move to start building that investment portfolio. Think of it as a stepping stone.

On the other hand, don't limit yourself to just one place. Maybe there are other areas where you can invest that align better with what you love—good investment potential and a lifestyle you enjoy. Your inheritance provides flexibility, so diversifying your investments could be a smart move. The Missouri property could be part of a bigger plan- helping you build your financial footing while you work towards your ultimate goal of getting back to California. It's all about balancing the present and future, so take your time weighing your options.

There's no clear-cut answer, but exploring different paths and considering what matters most to you will guide you tbh! Enjoy the journey and good luck with whatever you decide! :) Wishing you a fantastic New Year ahead Jack! :)

Hey Amanda- Investing in real estate can be a puzzle, especially in markets like San Diego where prices and rental returns might not align easily. Living in the property for a couple of years might change things as it could potentially offer some tax advantages, like capital gains exemptions but it might not immediately transform a negative cash flow into a positive one.

If your primary goal is to generate immediate positive cash flow from rental income, considering other locations with more favorable conditions might be worth exploring. This might involve looking at cities or areas where property prices are lower relative to the potential rental income they generate. So what the other people here said- you can invest out of state..

Each market has its own dynamics, and it's essential to weigh your priorities and goals against the market conditions to make the most informed decision for your real estate investment journey. If immediate positive cash flow is your primary aim, exploring other locations with better investment prospects might be the way forward. Good luck Amanda!! -Michelle :)

Hey Hunter- Starting out in commercial multifamily in a new area is exciting but getting a handle on underwriting and finding those deals takes a bit of practice, but you're diving in headfirst – which is great to be honest!

Now, when it comes to diving deeper into a deal, getting stuff like T-12 or rent rolls after that initial deal packet can be a bit of a puzzle. Have you thought about reaching out directly to the sellers or property managers? Sometimes, they're the goldmine for that extra data.Building some relationships with local property management companies or rubbing shoulders with investors in that area might just give you the edge in getting those nitty-gritty details.

You're on the learning curve, but it sounds like you're taking all the right steps. Best of luck on your real estate journey Hunter!! :) - Michelle

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Hi Rose!

Renting Thoughts:

You've got your renovation done, and it looks fantastic. Renting could offer you a consistent income stream, which is sweet. But yeah, dealing with tenant applications can be a real chore, especially when most of them don't look too promising. Have you thought about hiring a property management company to take that load off your shoulders? They might be able to look for good candidates. Consider whether you make it into a Short-term, Mid-term, or Long-term rental too.

Selling Thought:

On the flip side, selling now while it's all shiny and new could fetch you a tidy sum. But remember, selling has its own set of considerations. You'll want to think about your long-term real estate goals and any tax implications. Also, market conditions play a big role. If it's a seller's market, you could do well. In a buyer's market, it might take more patience.

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Remember to ask yourself, "what's my broader real estate plan?" It's a lot to weigh, for sure. I am realtor, but an investor as well- having my properties rented out checks out with my real estate goals! Best of luck to you, Rose!

Hi Zen- that assumable 2.75% VA Loan sounds like a good opportunity. Since you're already in the process of closing on another property, you're in an interesting spot. The financing choice really depends on your current financial situation and your investment goals. HELOCs, cash-out refinancing, and investment partnerships can be great, but each comes with its own set of terms and conditions. Hard money loans are an option too, but keep in mind that they often have higher interest rates and shorter terms; tho might be a good move to have a one-on-one chat with a financial advisor or mortgage specialist to figure out what aligns best with your current portfolio and long-term goals so it's specific to what you need. Best of luck!!

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Hi Caroline,

People invest in low to mid-income areas because:

Affordability: Properties cost less.

Better Cash Flow: Rental income minus expenses is higher.

Easier Entry: You can start with less money.

Less Competition: Fewer investors are buying.

Stability: Markets are steadier.

Easier Rules: Regulations are simpler.

Steady Demand: Rental demand is reliable.

Property Variety: Different types of properties are available.

But remember, these areas have challenges too, like management issues and potential property crime. Research is really vital on this part! And if you're familiar with the area, that's good.

Investing in luxury real estate in areas like Beverly Hills has its pros and cons too:

Advantages:

-You can earn high rental income.

-Tenants might stay longer.

-Properties can increase in value.

-It offers a great lifestyle.

Disadvantages:

-Properties are expensive to buy.

-There are fewer potential tenants.

-Maintenance can be costly.

-Luxury markets can be volatile.

-You may face tougher regulations.

-More competition from other investors.

Hope this helps!!