All Forum Posts by: Chris Reece

Well guys I didn't expect alot of personal advice on my situation or as much perspective as I'm getting here so I just wanted to say thank you very much and I feel a little safer now amongst like minded ppl than I did alone a few weeks ago. BP will definitely be a part of my investing strategy moving forward. I'll definitely be reaching out to Chris Clothier to get his local opinion on some things as he is clearly a respected member amongst you.

Chris, can I ask your opinion about my situation, knowing the local market in Memphis.

My ultimate goal this year was to go from 3 to 8 properties. Purchased in the $100k range with 20% down. That puts me at about $750 out of pocket each month for P/I/Taxes/Prop Mgmnt. If I buy right, from what I know I should be able to average over $1050 per month in rent on those properties. My goal with this cash flow for the next 10 years or so was simply to build equity and to help me pay for my dream home with my family that I hope to purchase next year and in case of job loss, health issues, etc I'd like a cushion to count on and I'm willing to sacrifice a little up front to get it.

Chris, do you think that strategy is a good way for my family to count on $1500+ in cash flow plus equity build up each month or knowing the market would you suggest a different route. An honest answer based on your vast experience in Memphis would really help me sort some stuff out here as I choose a path forward. Will Barnard, Jeff Greenberg, Joel Owens or others who may have insight could be very helpful as well.

Again, didn't plan on my intro post going this direction but with the knowledge you have and knowing more about my situation I feel like you could easily give this plan a thumbs up or down. And I understand some of it is personal preference.

Thanks guys!

Thank you everyone for the replies, thoughts and well wishes.

Jeff Greenberg, thank you so much for your simple suggestions. I look forward to researching each one and seeing if its a good fit. So my thoughts are clear: $250 per month on a $90k investments doesnt sound great. But in Memphis last year I was doing $250 per month on a $20k investment. That plus an increase in equity each year seemed great to me. I've done cursory looks around the LA area and nothing seemed to come close. I'd love to be close to home, so maybe I just need to look a little harder or get more creative? Will Barnard I'd love to hear any ideas you have on sticking close to home and still turning a solid profit. You are way ahead of me but I'm in Santa Clarita pretty often on business so if I can ever grab a coffee with you and pick your brain I'd love to do so.

Kyle J. So maybe others can learn from my experience, the big repairs that hit me this year were new fridge- $500, A/C Compressor - $1300, excessive repairs from a tenant moving out - $600. Then I just got nickle and dimed to death after that.

I wouldn't really blame the "turnkey" operator at all. They actually provided exactly the service I thought I was paying for. As it turned out it was extremely hot in Memphis this summer and the Compressor on one of the units worked but it turned out to be too small so I had to go up 1 ton. I was getting lots of complaints and not one since I changed it. I wouldn't blame that on the "turnkey" guys.

The tenants that were put in place by the "turnkey" guys were great and they paid great for a year and a half so I can't complain but the PM put one good tenant into a unit and a not so great tenant into the other. The not so great guy keeps catching up but only after being served court notices and all of that costs money.

I'm not SUPER concerned at this point. It seems like such a high turnover and odd big ticket items like a new compressor are anomalies. Unfortunately it just doesn't take much being 80% leveraged to knock your profits to zero. My biggest question right now is if I buy 20 properties out there is there a chance for a $4k loss in a year being 80% leveraged? That would really hurt when I am expecting a $40k return. Thanks for the thoughts and advice!

Hey Kyle J., I have three properties in pretty good areas of Memphis. In 2011 each property brought in about $250 per month cashflow at a purchase price of about $90k a piece I was thrilled!

In 2012, oh boy, where do I start. Lots of repairs...HVAC system, replacement fridge, 2 turnovers that needed lots of repairs. One of the tenants that got placed never pays on time unless threatened with eviction so the fees have been through the roof. All said and done I lost $1500 instead of making a $7k. Painful! The worst part is I'm not sure what lessons to glean from the experience or how to improve returns so here I am, learning all I can to try and make the most solid decision I can and to see what some of the pros are doing. Any advice? I've got another $60k burning a hole in my pocket but I'm understandably a little gunshy and wondering if I'm not better off sticking it into a mutual fund somewhere. I need to get back on the horse, just trying to figure out how.

Karen M. It sounds like you are at a level I one day hope to be. I would definitely attend a gathering of other BP ppl so hopefully I'll see you there!

David T. What kinds of investing are you doing out in Ontario? SFR? Multi-Family? I'm investing in TN right now because I thought I couldn't get the same results close to home but now I'm starting to wonder...

Wow! This site is fantastic. For an information addict like myself this ought to provide lots of fixes! My name is Chris and I'm from Los Angeles, CA and I'm looking for all the help I can get.

Currently I have a few rental properties in Memphis, TN that I've purchased from "turnkey" companies. I was thrilled with the results in 2011.....2012, not so much. I have a very busy job that I love so I'm not looking to get into real estate full time but I end up with $50k - $80k extra in cash each year that I need to do something productive with and real estate is where I'd like it to be. I'm looking for all ideas on the best way to invest this cash for a decent cashflow that causes me as few headaches as possible. The forum posts on Memphis aren't too positive and reflect my current situation. I'm not completely against Memphis at this time but definitely looking for other ideas.

Thanks guys!