Memphis Real Estate Investing

The city of Memphis is located on the Mississippi River in the southwestern corner of the state of Tennessee.   This city is a regional hub for an area comprising of northwestern Mississippi, southeastern Arkansas, and southwest Tennessee.   Memphis is known as America’s Distribution Center and his home to the busiest air cargo airport in the world.  Its central location and significant transportation infrastructure is one of the reasons that Expansion Management Magazine ranked Memphis the #7 place in America for business expansion in 2005.

Read the rest of this entry »

Many people today are so inundated in the world of ‘Flip This House’ and ‘Property Ladder’ that they never get a truly strong grounding in the basics of owning investment property.  Yes, ‘flipping’ houses is a type of real estate investing, to be sure – but ‘flipping’ homes provides you, if successful, with a one – time full taxable lump sum of cash.  It fails to provide you with any of the long term wealth – building benefits that rental homes offer, and when done properly, rental property can be a relatively headache free form of real estate investing.

When considering the purchase of an investment home, consider the following guidelines to help keep you on target:

Read the rest of this entry »

Today’s real estate market offers a variety of choices to the potential investor.  Among these, for most Americans saddled with credit card debt and other expense laden items, the most attractive of the investment options is ‘flipping’, or reselling a house for a substantial profit, post – renovation.  This technique is popularized by shows such as ‘Flip That House’ or ‘Property Ladder.’  But, as we can see, there is a dangerous double edged sword associated with flipping a home that can prove to have disastrous consequences for a would – be investor.

Read the rest of this entry »

Amidst all the cheerleading by local Memphis wholesale ‘experts’ about how they have sold ‘x’ many properties, and the promise of ‘turnkey, headache free’ solutions, comes something unexpected:

Reality.

Time and again, here at Discount Property Warehouse I watch as investors who purchase through other wholesalers get caught up in the hype of cheap Memphis real estate, plunking down hard earned money based on promises of equity and cash flow, only to forget about such things as vacancy, maintenance, and appropriate rent ranges, and in doing so wake up with a little surprise known as 30 years of negative cash flow.  Has this happened to you?  I pray it hasn’t, and in order to help you avoid such situations I have put together a little guide to owning Memphis rental property that some of you may find enlightening, although it may clash directly with the snake oil you have been sold from wholesalers who are interested solely in whacking you over the head for a massive commission.

Read the rest of this entry »

I buy a considerable volume of homes each month.  Some I keep, and most I resell.  I guess you could call me a ‘wholesaler’, although that term has come to represent an antiquated image of a shady character trying to hustle 25k – 50k markups on unsuspecting buyers.  What I do is a much more streamlined process, meant to keep everyone in the process, including myself, fully accountable.  And part of that accountability is insuring that deals I present to investing clients meet the standards of excellence that I have set forth for myself in my personal portfolio.  It’s an approach that works really effectively, and I feel that the principles I use daily in my search for investment homes can be used as effectively, if not more so, by independent investors(like you!).

Read the rest of this entry »

I consider myself a very positive person.  As a former public school educator and athletic coach, I really see tremendous value in positive encouragement and motivation.  But, as much as I would like to tell you that real estate investing is the ultimate path to financial freedom, can change your life, ZIP code, give you wings, grow all your hair back, etc. etc., I think I really need to tell you the hard truth:

Real estate investing isn’t for everyone.

Now, it took me a long time to realize this, and I am a full time investor.  And, I am in no way trying to discourage you from pursuing your dreams through the vehicle of investment real estate.  But yesterday I sat down with a new investor who purchased two homes from a local wholesaler in Memphis(not me, obviously) who offered a ‘turn key’ system.  This ‘turn key’ system turned out to be a complete farce, and by the time the investor discovered this for himself, he was overleveraged in properties that he will never be able to sell and is going to have great difficulty getting refinanced.  So let me save you some time, money, and heartache and give you a few key pointers that you should take to heart before you begin signing on the dotted line thinking financial freedom is coming in a few weeks when someone promises you an ‘impossible to lose’ deal.

Read the rest of this entry »

I bought a house yesterday for $11,500 on a street named Willowview in Memphis, Tennessee.  It needs about 5k in work, and will produce $600/month in rental income.  I manage our own properties, so we are looking at true net cash flow here, not counting vacancy and maintenance.

Good deal, perhaps?

What if I told you that the house was sold 8 months ago for $62,750 – right before the owner stopped making payments?

Clearly, on paper, now this is a great deal.

The massive 82% discount that I received on the property(be all in a property at 18 cents on the dollar, anyone?) however is certainly not enough to justify the acquisition of this property.  Anyone who is familiar with some of my real estate theories knows that ‘pieces of the puzzle’ cannot be broadly defined solely by purchase price.  Many other factors need to be taken into consideration.

Read the rest of this entry »