All Forum Posts by: Chris Clothier

 So far, you are asking a question that is tough to answer with any detail.  Why don't you share a bit more about where you are in the process, what you know about investing in real estate, what your goals are - short and long-term, and tell us a bit more about why you are asking your question here on BP?

It helps readers a lot by providing context, and those of us who have some time in the market can look back into our histories and give you some advice.  Right now, any answer is just preference without being able to go deeper and really give you quality advice.

Best of luck @Enrique Hernandez!  Love your story and wish you lots of success.  There are a lot of really good people in the Memphis real estate community, and plenty of people will help.  I avoid the multi-family market here, so unfortunately, I will not be a good go-to here, but I am confident you will find quality resources and help here on BP.  

Congrats on the family and the decision to relocate.  Good luck!

 Hi Kasi,

I reviewed our information in SF as we document everything and found where you contacted our company.  I wanted to clarify a point for readers of this thread and for @Praveen Kumar.  You only looked at pictures on our website; properties were never sent to you.   You would have preferred to see our properties like a marketplace listing, but that is not how we operate.  We are a relationship company.  We value building deeper relationships with investors with whom we align perfectly rather than having superficial relationships with everyone who wants to buy.  I respect your decision not to move forward speaking with our company.  That made it easier for both of us. 

We are a customer service company that happens to work in the real estate industry.  This is how we've earned our reputation over the past two decades.  To maintain our standards, we have a process for working with interested investors like yourself.  We receive between 500 and 700 inquiries monthly from investors who want to learn about our company. Most do not purchase properties, and that is by design.  We only work with investors who take the steps to get pre-qualified and spend a bit of time getting to know our company and allowing us to get to know them.  Even after that process, we only move forward with a fraction of those investors inquiring about our company.

We have many monthly inquiries from investors like yourself who do not want to go through this process and only want to see our available properties.  I respect your decision-making and the fact that you have your process.  However, we are not a marketplace.  We own every property we sell, and our company stabilizes them before offering them to our clients.  Every property is sold one-on-one, where we provide investors with the information they need to make a good decision.  We don't reach that point until we have had the opportunity to understand what an investor wants, their motivations, long-term goals, and risk profile.  

By helping you remove us from your list, you could focus on other opportunities, and we could focus on other investors for whom we are a better fit.   I wish you the best of luck as you go forward!

 Mehdi,

Welcome to BP!  After reading the rest of your responses, I see that you're coming here for a job.  All of the advice I will give you is my opinion.  It may vary from others' advice, and it will be up to you to determine what feels best for your needs.

In your position, it is super smart to rent first.  Learn the area, meet other investors at meet-ups and one-on-one conversations, and once you feel more confident, you can make a purchase to live in.  As for starting a new job, I would advise you to focus, focus, focus on the job that provides you the opportunity to invest.  Your time is best spent producing the revenue that allows you to invest in the first place.

That includes using local agents you meet and feel are a good fit for you, property managers, possibly buying completed properties like the one you posted here, and outsourcing as much of the process as you can as you get started.  And yes, you could engage with a Turnkey company as well.  Surrounding yourself with a team brings some risk, but the risk is on your ability to judge people and processes.  If you try to do it all yourself, the risk is much greater because there are many more opportunities to make a bad decision that can be very costly.  

As for the property you posted, that is a great area.  I'm not a huge fan of townhomes, but the Sachse area is great.  It is very convenient for transportation and recreation, and that particular area is in the path of progress.  I also like that it is close to a school.  With all of the new construction close by, I think there is a lot of room for valuation growth and appreciation.

You are looking at your numbers wrong.  I would calculate my numbers by putting every dollar from the rent into my RE account.  The dollars you receive above the fixed monthly costs are 100% for that property.  Not for dinner, coffee, trips, or fun.  They are for holding that property only - that money IS your cash flow.  Every dollar you receive will have one purpose.  The renter has given you the money to cover your borrowing costs and pay for the home's upkeep.  If you treat the renter (resident) well, provide a well-kept home that you service regularly, and stay on top of any maintenance issues, a resident will likely remain in the house for many years.  During that time, you will have no vacancies and little maintenance costs, and the resident will provide the $$$ to reduce your principal. 

If you focus on long-term holding for five to seven years, then using the above scenario on the house you are looking at, you will make significantly more on appreciation and debt service than cash flow.  Many inexperienced investors pass on the deal you listed for the reasons you listed.  While many experienced investors buy them up as fast as they can.

You are going to get a lot of varying and different advice.  My suggestion is to be patient and thoughtful.  You are in a great position, and your capital is precious.  There are a lot of good people in Dallas and very experienced professionals in all services you will need.  You can also find many here on BP.  Best of luck to you as you get started!

Nothing about your post sounds normal for them.  Your next move needs to be a plane ticket to Memphis as soon as possible to find out what is happening.  I am assuming by your post that you are financially invested and own the property.  Then, if you are not satisfied with what you find, you can explore other options, but for now, I would find out what is happening on the ground face to face.

Best of luck - Chris

@Michael S.

The Huntsville market is tough right now. We may find a handful of deals this year. We only found a handful last year. However, it depends on an investor's goals as to whether or not Huntsville is a market they should be looking at. Cash flow is a math problem. As we all know, the standard way BP says to calculate cash flow actually leads investors away form long-term opportunity and leaves a lot of investors on the sidelines because they don't understand IRR and the multi layered dynamics of investing long-term.

For me, I love Huntsville, and wish we could find more deals there.  There will be fluctuations on rents and much of it is property and timing dependent and not necessarily market dependent.  As a management company, we also have a duty to get a property occupied with a qualified resident as soon as possible and sometimes that means adjusting rents down for right now to generate revenue.  We can work on maximizing that revenue in the future.

I doubt an out of state investor is going to have success BRRRR in Huntsville right now, but then again, every investor gets to define success for themselves. I do think that an investor should acquire a long-term buy and hold property if they can find them right now because Huntsville is taking all of the right steps to continue to grow. They are investing in infrastructure, housing, public safety and taking the steps they need to take to attract more jobs. It is a small town, definitely a tertiary market right now, but that is where opportunity is going to be found.

I think LTR, in the right location, can provide enough revenue annually to cover all holding and leverage costs while the resident pays down the principle and the demand in the city sustains slow and steady appreciation.  That is a mouthful, but again, a patient investor with the right risk profile, can be successful in Huntsville.  In my book, that is a win over a 7-10 year hold.

@Chris Lin,

Thank you very much for spending time with me on the phone last night.  I have shared your kind words with our team and appreciate your willingness to share.  We have also addressed where we fell short and failed to follow through.  Again, as you asked, no one is in trouble, but we have high expectations for our team, and there are indeed steps we can take to improve.

I'd like to recap for readers, and please let me know if there is anything stated incorrectly here.

We primarily failed to be proactive on the front end once we knew the resident used the legal system to their advantage.  It should have been communicated that we had a plan to assist you and would waive the new resident lease fee.  Not because we had failed - this was a four-year resident entering their fifth year on the property when they got into financial trouble.  But, we recognize that the experience you were having, multiple months without revenue and no clear time frame to be fixed, is not a typical experience with our company, and when and where we can help, we will.

Our team didn't follow up as we said we would, so you asked us for updates instead of how we plan to operate, which is updating you proactively.  That should never happen.

We also discussed the option of selling your property or even transferring management.  Our contract states that we charge the entire contract, including unpaid fees.  That is in the contract as a deterrent to prevent an owner from using our services to find a high-quality resident and then moving the management, thereby hurting our reputation with the residential community.  I can think of one instance where this was applied.  

In your case, we work for you.  We have worked together for 5 years, and two of your four properties, purchased I believe in 2022, have both renewed their leases and are operating smoothly.  If, for any reason, you needed to move your properties or looked to sell, we would be happy to waive that clause.  

We discussed a few more items last night and I will make sure we follow through for you on those.

--------------------

Again, I appreciate the opportunity to speak.  If you had not shared your post, as an owner, I would not be aware of the issues you are experiencing.  We are not perfect, and we only know where we fail when we are told.  I also appreciate that you share this on BP.  I never shy away from accountability.  We work hard and know our reputation is everything and a little transparency never hurts any company!  

You now have my direct number, so please don't hesitate to reach out if I can do anything for you.  

best -  

 FYI Dominic, the resident had been in the property since early 2019 and ran into issues in 2024.  They hired an attorney who was skilled at assisting them stay as long as possible.  Unfortunate.  

 For transparency purposes, I believe you meant to say that you purchased a turnkey property from Memphis Investment Properties, not Memphis Invest.  Is that correct?

@Shiloh Lundahl,

At this point, the amount of time you're putting into this is making me laugh.  Perhaps you have this kind of time and energy to waste.  You have an idea that you want to promote.  You believe in it.  The more time you spend talking about other options and try to build up the negatives, the less time you are spending on what you fell are the positives of your own idea.

If you believe that you are onto a great idea using L2P option contracts and forming partnerships where someone else provides 100% of the money while you provide 100% of the real estate-related functions, then start it up and make it work.  Best of luck to you.

I think @Dominic M. did an amazing job, much better than me, on your post explaining how he would want to see a deal like the one you described.  I have no interest, and neither will a majority of investors.  But most investors have no interest in buying a turnkey property either, and we have figured out a way to deliver a helluva product and value to those that do.  You know how we do it?  We spend zero time comparing against other options.  

You didn't read what I wrote above because you still want to compare your idea against something that doesn't exist. The word turnkey doesn't mean anything. If you are trying to compare your idea against REI Nation, you're over your skis. The two value propositions are not even close.

@Bob Lachance - I love that you jumped on this post, especially touting the benefits of turnkey, because he's not interested in buying turnkey.  He is interested in showing why his partnership idea is better than turnkey.  It's a passive-aggressive approach, but hey, to each his own.

Shiloh, you said you used to be in a mastermind with my brother, Kent.  He'd tell you you're wasting your time and energy if he were here right now.  His advice would mirror mine - to start your company, build your brand, add value to the forums here on BP if you're going to post, create the marketing for your idea, and then work your backside off to make it work.  Quit comparing it to other forms of investing because you are wasting your time and, at this point, creating a lot of unnecessary negative attention to your idea.  You're off to a bad start if you must create a poor perception of other options to make your concept look good.