All Forum Posts by: Reed Rickenbach

@Carter Ford there are plenty of properties in that price range, you'll just need an expert guiding you. You can go wrong here fast. I have an investment-focused brokerage here in town and am happy to help. 

I totally agree with @Dean Harris that it depends on the class of the rental (A, B, C, C) - I have a higher-end rental in Germantown that applicants would laugh at if there was no stove. On the lower end you can get away with less. Helps with the risk of theft as well. Talk to a local expert. 

What market are you referencing? I'd underwrite the deal as any other - make sure you are conformable with the quality & tenant base. It can be a positive for short term rentals (if in a good area) to be near the airport. It can also be an absolutely awful area. Depends on the city & airport. 

1. How is it different than having a multifamily property or SFH will S8 tenants? An apartment building would be considered multifamily. There is nothing inherently different about the process of working with Section 8 between SFH, small or large multifamily. There are major differences between SFH, small and large multifamily, though.

2. In regards to the valuation of the property what impact will this have and when do you know when its time to sell? Having all Section 8 tenants may cause you to have a higher cap rate on your exit due to a higher headache factor surrounding Section 8. You sell when it fits with your original business plan (targeted NOI is reached, timeline is reached, etc.).

3. How do you value a apartment that will be rented out to primarily section 8 tenants? Same as any other apartment building, NOI & cap rate.

John - as long as you are still following strict screening criteria I agree for single family. For multifamily or commercial, the rental rate impacts the value of the property. Sometimes worth waiting in that case. 

Join your local Real Estate Investor Facebook Group. Should be "*City Name* Real Estate Investors."

You are going to see a lot of wholesalers offering off-market deals there.

Beware, even seasoned flippers are having a tough time making flips pencil at the moment. Not sure I'd recommend jumping straight into a flip, but if you're buying in cash you'll have less risk. 

I would recommend house-hacking or partnering/mentoring to get a better understanding of real estate on your first deal. 

I have heard positive things - expect lower overall returns in exchange for them doing the work! 

What does your management agreement say about up charging repairs? In my limited exposure to using PMs in Memphis (I self-manage), most had a scale of upcharge depending on the cost of the service. 

That does seem high. Depending on the size of your PM company they may or may not have an internal maintenance position to handle these. If they don't, they likely contracted it out and added a 20% mark-up on the service. 

I run a small maintenance company in Memphis that handles things like this for investors for this exact reason. 

I invest in MF in Memphis. Closing on a 5 unit next week. Happy to chat. 

You picked great zip codes - I own (or have owned) in all that you have listed.