All Forum Posts by: Vinay H.

@Julie O.

If you were to list your house, it would probably list at 499k. Your cost of prep (1500 sq ft carpet and paint) is around 10k. Assuming you sell for listing, your proceeds could be

Selling 500k

Minus Prep, staging 10k

Minus Seller concessions, closing costs 10k

Minus RE commission @5% 25k

Net cash = 500k - 45k = 455k

So Zillows preliminary test cash of 427 k is not far - I guess is 28k worth your aggravation of open house, scheduling the repairs and waiting for a conventional customer to close. I obviously don't know your market but of course if you sell for 530k then it is a no brainer but the fact that the realtor came in at 500 to 530k tells me the 530k is the upper limit....

Yes make sure your attorney reviews this. Will the loan be recorded as first mortgage? Is the rest of the 70% coming from your cash? Have you had the property appraised and run title check to make sure it is free and clear of liens and other encumbrances?

What does not work? 440 a month on 26k is a pretty nice return. The concerns are how much renovation and what is the value of the property ARV..... and if you can raise the rent

TO answer, we need to know what is current rent and cash flow...

Thanks @Chris Clothier. I appreciate your thorough response. I agree it seems @Kelly Pierce has computed the property tax incorrectly and based, on this, the numbers should be re-worked. However, nominal 900 monthly rent on 118k initial cost (115 purchase + 3 closing) is not meeting the 1% rule.

I however do stand by my comments that @Kelly Pierce should do her own diligence and that Memphis Invest makes their money the day that Kelly forks over her 118k check and has 0% risk thereafter. 

I do regret having said that Memphis Invest *may be* a shoddy turnkey operator and I look forward to reading the success stories of both Memphis Invest and OP.

@Kelly Pierce Please review this earlier post on bp about Memphis horror story As an out of state investor I chose Buy Memphis Now company over others for my first turnkey rental property purchase and I am now repenting my decision. They sold to me a property that are having break-ins from Day 1! Apparently a squatter seems to claim the property by breaking in from the very first day, they are very well aware of this situation before they sold it to me as I have photos showing that similar break-ins happened to this even before me buying this property! I also had to lose my tenant because of these break-ins. If the break-ins started happening after a year or so of my purchase I can understand but these started happening even before I purchased the property and as an Out Of State investor I trusted them but they hid this information from me and sold this property. As an out of state investor I expect them as a turnkey provider to at least take hold of the current situation and secure the property and make sure that the property is break-in free and then hand over it to me as I was not aware of all these issues while buying the property! However they chose not to answer my emails now after the latest break in!

@Chris Clothier Thanks for jumping in. Can you clarify for us how Memphis invest can be marketing a property with a projected ROI of 2.25% as a viable buy and hold investment? That’s not an investment that’s barELY a savings account with all the drawbacks of REI. Heck, I would rather just find a CD paying 2.5% and park my money there without the aggravation of tenant and property management.

@Adrienne Medina I would work partner with up to 3 or 4 people, each pool 50k and then do some flips.

In mass, a typical cost for contractor grade strip and re-shingle with flashing and ridges is  300-400 a square. (100 sq ft). Yours is 13 squares, give or take, so reshingling/reroofing should run around 4k to 6k. All bets are off it the underlayment needs to be replaced and any extra trim work needs to be replaced. But from the sounds of it, 5k sounds fair for a 13 square roof. Typically a crew can get this job done in 1 day.

I am sure if you look at what Memphis invest is doing - they are probably buying these wholesale for 50k a door, spending 10-20k on a fresh coat of paint and carpet and then marketing them as turnkey to out of state. Their profit is coming from selling it at list price to you and also take a little off the top for Property Management services. In addition, any shoddy workmanship they may have done (which typically they do on these quick flips) will be your responsibility to fix. 

I would not proceed on this unless you and a trusted home inspector can actually walk through the property in real life and see with your own 2 eyes.

best of luck