Memphis Real Estate

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A montage of lively communities, Memphis is no longer the laid-back port town it used to be. The downtown Memphis area is where the life of the city really is. Here one can find antique shops, restaurants, art galleries and coffee shops just a walk away. The downtown area is home to more than 23,000 residents – a number that is steadily growing with the building of houses, apartments and condos in the area. Downtown Memphis is home to Beale Street, the celebrated “Home of the Blues.” Beale Street features a number of bars and cubs that cater to jazz, blues and rock and roll music. Then there is the Pinch District, which is home to cafes and bars that are frequented by local residents and tourists that are attending events at the nearby Pyramid.

Midtown Memphis has some of the city’s most pristine neighborhoods. Tree-lined avenues are flanked by grand bungalows and apartments. Overton Park, located in the center of midtown, is one of the United States’ biggest urban parks. Some of the city’s numerous attractions are the Memphis College of Art, Memphis Zoo and the Overton Park Shell. Several universities and colleges augment Midtown Memphis’ diverse atmosphere. The neighborhoods include Vollintine-Evergreen, Cooper-Young, Overton Square and Central Gardens.

Most of Memphis’ high-status housing areas, shopping and office centers are situated in East Memphis. The Memphis Botanic Garden, Audubon Park, Lichterman Nature Center and other public parks and gardens give a unique appeal to East Memphis. Chickasaw Gardens, for one, is full of elegant houses. The Pink Palace Museum and Planetarium lie adjacent to that neighborhood. Then there is Cordova, which is a rapidly growing community in the Metro area.

Shelby County, outside of the main city, boasts of a number of beautifully integrated cities and towns. These include Arlington, Bartlett, Collierville Germantown, Lakeland and Millington.

Neighboring areas that surround the city include Fayette County, Tennessee; Tipton County, Tennessee; Crittenden County, Arkansas; DeSoto County, Mississippi; Tunica County, Mississippi; Tate County, Mississippi; and Marshall County, Mississippi.

Article Source: http://EzineArticles.com/218989


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

 

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Winter Is Coming – It’s a Great Time for Real Estate Investing

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You’ve no doubt heard the concern that real estate sells best in the Spring and Summer – that the worst time for buying and selling houses is Winter.

And, Winter is coming! So what should you do?

First of all, don’t panic! We’ve been investing in real estate full time since January 2005. Here’s what we’ve found, not only for ourselves, but for most of the other investors we know. True: the number of calls you’ll get from sellers and the number of offers you’ll get from buyers will decline.

However, also true: the quality of those contacts will be much higher. Both buyers and sellers calling during these months are serious! So no, Winter is not the season to panic. In fact, some of our most profitable deals come at the end of the year.

I’ve heard many investors say that December and/or January are their most profitable months. Why?

  1. A lot of investors as well as real estate agents get out of the business during these months. They cut back or stop their marketing all together and often use these months to vacation. So, as long as you’re still active, you’re the one who will get the buy/sell calls.
  2. Many high net worth individuals need to use up cash to avoid taxes before year end and they turn to real estate. Now is a great time for you to be calling CPAs and tax advisors to let them know how you can help these clients.
  3. While families are together over the holidays, decisions are made regarding what to do with their parents’ home, or that it’s time to stop dealing with inherited properties. These sellers call us in January needing to sell estate properties.
  4. Fewer buyers during the holidays means less buying competition for us as investors and fewer buyers means sellers reduce prices to get their homes sold. This is the perfect time to buy at discount and begin renovating so your property is back on the market in time for prime selling season, Spring!

Bottom line, don’t panic. Get excited and be prepared to provide solutions for those needing to buy and sell in the winter months. The market is less active, meaning less competition, and the buyers and sellers who are out there are far more serious than the casual shoppers who come back out in the Spring.

What has been your experience in the Winter months? What will you do differently this Winter?

Article Source: http://EzineArticles.com/9823884


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

WHY INVEST IN AN OUT OF STATE RENTAL PROPERTY?

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When you live in a hot market, it is very difficult to find a rental property that will provide decent returns.  You are basically lucky if you can even get it to cash flow.  If you are okay with purchasing rental properties that don’t cash flow then your chances of financial freedom are slim.   There are some folks who also are okay with even just breaking even on rental properties.   This also I avoid like the black plague.   I just cant find any reason why I would ever do this.   Some may say that they are hoping for appreciation and that in a few years they can make out by selling the house at significant amount more then what it was purchased for.   This I also avoid.   I am not in the business of gambling my friends and this is exactly what type of investment this is.   I mean don’t get me wrong, I like to throw some money down on draft kings during football season for some fun but that’s a whole different topic to be discussed another day.

At some point you will come to the conclusion that if you seriously want to invest in real estate, rental properties that is, you will have to go outside your comfort zone and start looking outside your hometown.   This could be an extremely scary thought for some however if done properly you can minimize risk.   Just make sure you have a strict criteria and you due proper due diligence on your new city, your new turnkey seller and the house(s) you are interested in.   If everything comes out as expected then I say go for it. That is exactly what I have done now and so far its going great.

I thought long and hard about what city I wanted to begin purchasing rentals and after countless hours of reading about all kinds of statistics and stories I decided on the great city of Indianapolis. Indianapolis fit all my criteria as a city and from a real estate market perspective.  The following stats and qualities below can be applied to any city. Its a good idea to incorporate some if not all of these in whatever city you wish to invest in: (in no particular order)

1) A steady increasing population.   If you google your city name with population appended to it you will see the chart.   You want to see this going up, not down.

2) A city with a diverse economy and not tied down to single job industries.  One with plenty of big employers there and the city is not relying on single companies or an industry to keep it afloat.

3) A city with a good sports/arts/cultural awareness.   Nobody wants a boring city.   People needs things to do and places to go.  Look for professional sports, major universities.   A city that has a great night life also helps.   If it has plenty of bars and a good music scene it will attract more people.  More people = more renters!

4) Cheap real estate! I realize the amount real estate is worth is greatly dependent on where you are from and what you are used to.  To me and the type of properties I’m looking to purchase, I want these properties to be affordable.  Its possible to get a good rental in blue collar area for anywhere between 50k to 70k all in.  I also have houses in my hometown where they are in the 115k to 150k range.  These types of properties make for good rentals as long as the rent prices are in the $1200 – $1600 range.  Now grant it the cheaper the properties, the more run down the neighborhood might be.  This is why due diligence is vital and you need to make sure you do not purchase in a neighborhood you are not comfortable in.   I like C class, blue collar neighborhoods with low crime.   These are perfect rental properties and have great cash flow.


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

IS TURNKEY REAL ESTATE RIGHT FOR YOU?

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Is turnkey real estate right for you? This is an important question to ask yourself, because let’s be honest: it’s not for everyone. As always, I suggest real estate investors try to reverse engineer their lives.

Think about your end goal; imagine what you want your life to look like down the road once you’ve achieved your Freedom Number. What do you envision your future to look like? Will you be spending your free time renovating properties? Or do you plan to collect rent checks passively, while you spend your time with your family doing the things you love?

Turnkey real estate is not for someone who is Type A and needs to be hands-on. If that sounds like you, we have a DIY playlist on YouTube that you might find helpful.

Here’s are a few key indicators that you and turnkey are a match:

  • You don’t know the first thing about finding a great investment in the right market.
  • You don’t have the time to commit to everything investing entails.
  • You don’t want to get your hands dirty doing a rehab.
  • You don’t want to worry about hiring contractors.
  • You don’t care to pick out paint, or find the right materials.
  • You don’t want to interview property management teams to find the right fit.
  • You want a totally passive experience and high ROI.

It’s a fantastic solution for those investors who want the benefits of high ROI and monthly cash flow, but don’t want to put in the work. Turnkey is totally hands-off, you just sit back and collect rent checks.

The entire system is rock solid. You don’t have to worry about paying contractors crazy rates, and your property management team is ready to go! Everything runs incredibly efficiently, which makes your business scalable.

Article Source: http://morrisinvest.com/


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Zillow Takes Aim at Small Investors

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This is a little different type of article than I typically write but I found this interesting and wanted to share. A few months ago, Zillow announced its Instant Offers program, which basically allows sellers to get offers on their homes within two days from institutional investors. These investors are highly qualified buyers and close with all cash within a week. At this time, Zillow claims that it is not offering this service to broker deals and charge commissions; it is doing it to fill a need in the industry. They claim that it is actually encouraging sellers to use agents, not vise versa.

Many agents are upset. In fact, according to a recent survey, 87 percent of Realtors think that Zillow is trying to become a broker and eliminate agents. Some agents, however, are excited about this shift and want to work more closely with Zillow.

If you have not heard, this is how the Instant Offers program is working in two test markets. A home seller completes an online questionnaire. From there, Zillow passes this information onto a small group of institutional investors who are buying houses in that market and to a qualified Realtor. The Realtor is tasked with providing a detailed comparable market analysis while the investors are tasked with submitting offers. Within just a few days, the sellers should have multiple cash offers and a CMA to compare the offers to. They then decide to go ahead and accept one of the offers where they can work with an agent to help with the transaction, or they can close the transaction without the help of an agent, or they can choose not to accept the offer and sell the house in a more traditional manner. This could include listing with an agent.

There have been several agents that claim to have received a large amount of seller leads under the new program. They submit the CMA and then are encouraged to follow up to try to get the listing.

I don’t see this as a bad thing for agents. Zillow is not charging any fees to the borrowers or the investors for this service, and claims that it is not interested in creating a brokerage or charging commissions. They generate revenue from ads and selling leads, not houses. Although many agents feel this could change because Zillow is not a profitable company. Entering the brokerage business could be a new profit center. I don’t see it that way, at least not yet. I see this more as a marketing ploy to attract seller leads for agents.

Although I am not concerned Zillow will take over the agent’s job, nor do I see this as a big threat to investors, I could see how one could view it that way. Zillow’s mission with the Instant Offers program is to capture every lead from distressed sellers it can and turn them over to cash buyers or their “pay to play” agents, virtually eliminating the small rehab investor. It is our job to be aware of what is going on and to maneuver our business to benefit.

Here is why I am not worried. First, the cash buyers are going to need steep discounts and the agents that just want a listing are going to be offering inflated CMAs. Those two could be so far apart it is going to hurt Zillow and the Zestimate it is so proud of. (Zillow’s opinion of value) This alone could make the program crash before it even gets going. That is not what I think is going to happen however. My guess is most sellers will end up listing the house with the agents providing the inflated CMAs. The agent will likely have trouble selling it because they will be listing it too high. This could be a great thing for a small rehab investor. Here are two ideas that you can implement to take advantage, assuming the Instant Offers program comes to your market.

  1. You can network with the “pay to play” agents. If you can prove you close on your contracts and build a relationship with them, they too will be bringing a cash offer to the table. There are ways to make your offer more attractive than the institutional investor’s offers. This could be a great way to get noticed by sellers before the distressed houses ever go in the MLS.
  2. You can track listings that appear to be too high in the MLS. Once they have been listed for a while, you can start to market to the seller and/or listing agents. Be careful though. You may not be able to market directly to the homeowner of a listed house unless you are unlicensed. Cash offers on distressed houses are attractive after the motivated seller has their house listed for a while with no traction.

Currently this program is only available in Las Vegas and Orlando, but there seems to be a lot of optimism around it, so there is a chance it hits your market before long.

Article Source: http://EzineArticles.com/9808971


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

 

9 Overlooked Steps That Make a Rental Property Profitable

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Rental property and real estate are lucrative side gigs and/or full time jobs. The problem is that countless number of people jump in with both feet, without doing any research whatsoever. They buy rental property or rent out their first house and end up losing money because they aren’t doing the small things right. If you can’t increase revenue, that you should decrease expenses. It is a basic business principle that especially applies to rentals.

Profitability is not a small feat. To use toddler vocabulary, real estate is hard. Loads of people fail. Focus on being a professional and minimize your losses. Winning big is fantastic, but consistent profitability, even during hard times, is what keeps a business afloat.

The Age of The Property

Property age is a piece of the pie that many buyers look past and shouldn’t. Your maintenance costs are directly linked to it. The older the building, the more upkeep you should allocate per year towards it. Ideally, items like lead paint, asbestos, galvanized pipes, and knob and tube wiring are fixed before you purchase.

There is a chance that a previous owner just hid these items and played dumb on the property disclosures. It is a BIG no-no to do, but people do it. Don’t let yourself get screwed over if you can help it. Hopefully your home inspection will find these items, but they can be missed.

YouTube has some great videos detailing these costly items and what to look for to find them.

Utilities: Tenant paid or owner paid

You may not think this makes a big difference, but if you have a multi-unit property, this can get expensive. Tenants do not care how much your energy costs are and they will do family members’ laundry in your machines, using water and electricity you paid for. Tenants will take long showers. THEY DO NOT CARE, unless they are paying for utilities.

Their world changes if they pay utilities. They take better care of everything better for some reason or another. It’s weird, but maybe they get more of a sense of ownership for their place of residence. Still don’t believe the profitability behind it?

Coin Laundry

If your units do not have laundry hookups in the units, but have a shared laundry space, use a coin laundry. This will recoup most of the cost of the water and electricity to run them. Also, tenants run fewer loads, so your washers and dryers last longer.

Most cities have a coin laundry service that will put their machines in your property and pay you a certain amount based on their usage. They charge a fair amount. Financially, you are better off buying your own coin operated laundry machines. They are only about $600-$1000 for decent machines and these will pay off in the long run.

Property Taxes

Property taxes vary widely based on which part of town or which town you are in. On one property, they may be $2000 per year, but across the city, the same type of property may have to pay $4000 per year.

It is best to check the county auditor’s website before you purchase. That is extra money in your pocket every year, so long as the rents and everything else are the same. Taxes suck, don’t pay more than you must.

Neighborhood

The perfect property is different to each person. A few items are the same though. No one wants an area with more crime rather than less. A high crime area can be profitable, but it can also be disastrous. A questionable neighborhood can go bad in a heartbeat and this can make your rents go down. The higher the crime rate, the lower the rents. The inverse is also true.

An up and coming neighborhood is great, if you buy at the right time. It can make your property appreciate, but that is not something that you should plan on happening. A rental property should not be counted on to appreciate. You may disagree, but it is better to be pleasantly surprised rather than disappointed.

There are some useful crime maps out there and Trulia.com has one integrated with their listings tool that can be used, even if it isn’t quite perfect.

Zillow.com is a controversial and not always accurate site, but it can be used for certain things. See Bill Gassett’s article explaining more in depth as to its inaccuracies. Zillow is terrific for listing open apartment units you may have open, but is not perfect when it comes to its appraisal estimate or Zestimates.

Size of Each Unit

The size of each apartment or unit makes a difference in your bottom line for a few reasons. Obviously, the rents are more expensive cause the units have more room. Less obviously, this means that you are hopefully dealing with people who are slightly more established in their lives, since they can afford more space.

Along the same line of thinking, this tenant may take care of your place slightly better than a tenant who’s thought is, “well, it’s just a cheap apartment.” This is not to say there aren’t exceptions to every rule/guideline, because there are, but the chance that you may have less maintenance is a risk you should take.

Insurance

Property insurance is a necessary item for everyone, but how much you spend and on what amount of coverage is completely different. Only you know what amount is best for your situation. There is one certainty, more coverage is better when you have the unexpected happen.

For example, the first rental property I purchased, is in a flood zone. I bought flood insurance. Within 6 months of purchase, there was the worst flood in the area for at least 50 years. My building did not have water in it at all, but only by mere inches. I am never that lucky, except that one time… No one gets that lucky.

Buy more than you need! You may pay an extra 40 bucks a month, but it is worth it to have it when you need it.

Increasing Rents

No tenant enjoys a rent increase, but at a minimum, rents should keep pace with inflation. This means that each lease should increase at the same rate, which is typically around 3 % per year. Few owners keep pace with market rent rates like they should because they are afraid to lose a tenant. Having to replace a tenant can be costly and it is sometimes better to keep the rents a little lower than market to keep a long-term tenant.

Now this is not always the case. If a unit can go for $100 more per month, but you have long-term tenants that you do not want to scare away, what is the best solution? The best solution depends on your goals.

One solution can be to increase the rent by a fair amount, maybe $40-$50, but not too much as to scare anyone away. A second option is to increase the rent by the full $100, but only on the worst tenants. This accomplishes one of two things: either they pay the full $100 difference or they leave and you get a better tenant paying the full $100 difference. It is a win-win for the property owner.

Vacancy Rate

Raising rents has a habit of increasing the vacancy rate, because again, no tenant enjoys rate increases. Once you have a plan and raise rents in small increments, ideally your vacancy rate will be more predictable. Make sure you do your best to keep good tenants as best as possible.

You want the quiet, pays their rent on time, doesn’t destroy your property kind of tenant. They are hard to find and the happier they are, the happier your bank account will be also.

A tactic that you can try to use is to attempt to place people that are of similar demographic closer to each other in the property. This is not to say that you can discriminate in any way, because that is highly immoral and illegal. Think more along the lines of putting the little, old ladies closer to each other and not next to the loud and boisterous twenty somethings. It helps keep the peace within the property and keeps the vacancy rate lower.

Conclusion

Being in the black is not guaranteed. Countless people buy real estate for use as rental property, own it for a couple years, and sell it because they are losing or have lost money. Maximizing your return on investment now, compounds greatly the longer you hold onto a property. For example, see this rental property calculator. The more knowledge you have, the more profit you can make. This is why real estate investment associations (REIAs) are vital to attend. Membership is usually about $100 a year, and most will let you attend one meeting for free so you can see for yourself how valuable it is.

Knowledge is not the only item you should gain from these. Networking should be your other goal. You may meet someone, get along great, and they may speed up your learning or tell you helpful hints for your market. You never know who you may meet until you go. Just last week, I ended up sitting next to the person who runs the National REIA (I really did)! Now, for full disclosure, the National REIA’s headquarters are in my city, but you may meet a big shot investor or guru. Go to the meetings!

Article Source: http://plusfourzeros.com/


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com

Three Ways to Increase Property Values

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Real estate investors live and die by their ability to add value. With no added value, there are no profits. This is true with any business, but what makes real estate such a great business and a great investment, is the number of ways you can add value and cash in on big profits. Here are three ways you can add value to your properties.

Upgrades and Repairs

OK, this is the obvious one and is the reason fix and flippers can make money. Some repairs add a lot more value than it costs to do. The more creative you are with the improvements, the more value you can add. For example, I have a client that adds square footage to every house he buys. He really likes the inner city properties because they are the hardest to add square footage. You either need to finish an unfinished basement, or add a second story. There is not typically enough land on the lot to add an addition by increasing the foot print of the property. This client does a lot of basement finishes and “pop tops,” but where he has made the most money is the basement that is only 5 or 6 feet deep. He will go in and dig out the basement to a full 8 or 9 foot height and then finish it. Something most investors would not think of, so he is able to get the deal most other investors pass on. I have also seen some investors find houses that don’t really fit into a neighborhood and they make them fit. This could be limited bedrooms or bathrooms or funky floor plans. All of that can be changed. Obviously many cosmetic fixes like kitchens and bathrooms add a lot of value too. There is a lot more to it than this, but the idea is to buy a property at its true ‘as is’ value, (don’t over pay), and then add value with the repairs and upgrades.

Owner Finance

I love this one because it is so easy to add value with very little to no work. You will need to wait to cash in on your profits, but it is a way to increase a sell price significantly. You can also use this strategy to defer tax gains over a few years, instead of taking a big hit all in one year. When you have a property for sale there are a limited number of buyers for the house, although right now that pool of buyers seems pretty big. If you can increase the pool of buyers, the demand for that one house increases, which forces the price to go up. Someone that cannot qualify for an ordinary loan, limiting the supply of houses to choose from for that buyer, will likely buy your property. That also increases the price. You are adding value by giving them the chance to own a home that they normally would not be able to own. For this value, you should be compensated with a higher price and a decent interest rate on the profits, while you wait for the buyer to refinance and pay you off in full.

Shared Units

This is one area of real estate that I have not dabbled in, but it is extremely inviting. The idea here is to sell your property to multiple buyers. You are seeing this a lot in resort towns. It is always a vacation or second home. Have you ever been to a time share presentation? They are pretty enticing aren’t they? About 13 years ago my ex wife and I were in Florida and got sucked into a time share sales pitch. We decided to go because they offered us free tickets to Disney. We sat there for about an hour and a half and then the hard sale came. They were very good at selling the “idea” of the time share and had my ex wife sold. She asked me to move forward with the deal, but I could not bring myself to do it. I told her that I was not comfortable with an emotional purchase and that we needed time to think it through. “Can I please have our Disney tickets?” was my response. As we rode back to the hotel that afternoon, I started thinking about the math. Each unit can be sold to 52 different people because your purchase only gets you 1 week a year. Add that to the annual maintenance fees and the numbers are staggering. I know people who have flipped time shares successfully, because you can get them for free or near free on Craigslist, but it is not an investment I was interested in. With that said, I have considered doing a half or quarter share on a house in a ski town in Colorado. In this scenario, you are sharing a house with 1 to 3 other people so there is a ton more flexibility. You can use or rent out your weeks and you can be guaranteed valuable high demand weeks every year. It is a way to get a second home without the full expense. From the seller’s point of view, it is a way to get more for the house. ½ a share of a house is going to cost the buyer more than ½ of the fair market value. I have seen business plans from investors that would buy a house and quarter share it out. The idea was that after they improved the property and sold ¾ of the house to 3 different buyers, they would own the last ¼ free and clear. Obviously this strategy will work best in areas where people want second homes. The downside is if there are any improvements or major issues. I can see there being disagreements, so this is something you would want, as a buyer, to work out with all the other owners in writing before you buy.

Article Source: http://EzineArticles.com/9790980


Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses over 12 years of experience in real estate investing and property management in the Memphis and Nashville markets… Learn More…… www.memphisbuyandhold.com