All Forum Posts by: Philippe Schulligen

 Thank you John! Thank you Tyler!

Thank you @Chasity Logan! Impressive portfolio!

Out of curiosity, how is the workload associated to managing these properties? Have you ever considered passive investing in a syndication? 

Here is a BP Blog Post I wrote about the Memphis, TN market you may find helpful.

I have experience in multifamily acquisition and syndication in Memphis, TN. Would be happy to help!

Here is a BP Blog Post I wrote about the Memphis, TN market you may find helpful.

Here are reasons why I love the Memphis market:

1. Memphis is a large stable market: the MSA (metropolitan statistical area) is 1.3 million people. Its population did not change significantly through recessions.
2. Employers and industries are diverse: logistics (FedEx, Amazon), healthcare (Baptist Memorial, St Jude), other industries (Technicolor, International Paper). There is not a single primary employer in a single industry.
3. Companies are investing: Spending on new downtown Memphis development projects are projected to surpass $2.9 billion in the next several years. Over 250 revitalization projects, valued at $13 billion have been completed in the last few years. FedEx has pledged $1 billion to modernize its Memphis SuperHub. St. Jude’s Children’s Research Hospital has planned a $1 billion downtown expansion. Nike and Amazon recently broke ground or opened distributions centers.
4. Landlord friendly laws: termination notice for nonpayment of rent is 14 days.
5. Cost per multifamily unit for B/C class asset is affordable due to high cap rates: $30-$50K/unit.
6. There are thriving class A neighborhoods: Downtown, Cooper-Young, Overton Square, University District, East Memphis, Crosstown, Germantown. And more quiet residential solid class B neighborhoods like Raleigh and Southeast Memphis.

@Kon Zel I have experience in commercial multifamily in Memphis: my first deal there was 80 units, and now co-sponsor in 1000+ units. There are definitely opportunities in that market.

The pitfalls are obviously bad neighborhoods (easy to gauge talking to brokers or running crime maps) and also find the right property manager depending on the size and class of the property. 

Unfortunately, Memphis has a bad reputation and a lot of investors do not even want to consider this market:

Yes, Memphis, TN is not a market with double digit population and job growth, it is not a primary market like NYC or Atlanta, and some neighborhoods are rough and prone to crime.

But… Let's look at some positive characteristics:

1. Memphis is a large stable market: MSA is 1.3 million people. Population did not change much through recessions.

2. Employers are diverse: logistics (FedEx, Amazon), healthcare (Baptist Memorial, St Jude), other industries (Technicolor, International Paper). There is not a single primary employer in a single industry.

3. Companies are investing: Spending on new downtown Memphis development projects are projected to surpass $2.9 billion in the next several years. Over 250 revitalization projects, valued at $13 billion (C&W) have been completed in the last 4 years. FedEx has pledged $1 billion to modernize its Memphis SuperHub. St. Jude’s Children’s Research Hospital has announced plans for a $412 million research center, part of its $1 billion downtown expansion.

4. Landlord friendly laws: termination notice for nonpayment of rent is 14 days.

5. Cost per unit for B/C class asset is affordable due to high cap rates: $30-$50K/unit.

6. There are thriving class A neighborhoods: Downtown, Cooper-Young, Overton Square, University District, East Memphis, Crosstown, Germantown. And more quiet residential solid class B neighborhoods like Raleigh and Southeast Memphis.

I am co-sponsor in several commercial multifamily deals in Memphis along with operators/sponsors who own large portfolios including thousands of units in Memphis.

Not all deals are home-runs, but all deals make money.

If you select the right area (ex. class B neighborhoods), the right property size (ex. 100+ units) and the right property management company, Memphis is a solid market to invest in. We have many cases where the business plan we anticipated is matched with actual results, if not improved upon.

Yes we did a syndication with investors. No pref return. "Cash Invested" did not include the 20% for the loan. General Partners and Investors brought down payment + renovation + closing costs to the table.

P.