Archive

Archive for June, 2010

Great contractors are very important for real estate investing.

For all you Memphis real estate investors out there, tell me if you’ve heard this before.  “You

Mark Anderson, MemphisInvest.com

make your money when you buy.  You realize it when you sell.”  Heck, I guess it doesn’t matter if you are a Memphis investor or where you’re located, that advice holds true almost anywhere you are investing.  It’s hard to dispute this sage advice passed down by those who’ve gone before us.  But a lot happens between the time you buy and the time you sell, and most of it involves contractors.  For many beginning investors, finding a good team of contractors is one of the toughest tasks to completing your first deal.  At MemphisInvest.com, some of our own clients came to us because they struggled so much with finding responsible, reliable and reasonable contractors.  Indeed, some of the worst real estate horror stories you will ever hear involve contractors, which is why this is such an important topic.

So where do you find the right contractor, the person who will take your Memphis investment property from trash to treasure?

–        Real Estate Investment Association and Clubs – Many contractors are members of these groups.  This is a good sign as they should be used to working with investors.  Also, ask the other investors who they use.

–        Referrals – This is always one of the best ways to find anything, contractors included.  Word of caution: do not blindly trust what your friend is telling you.  Always do your own due diligence.

–        Supply Vendors – If you are looking for a painter, go to the local paint store and ask who their top three purchasers are.  The supplier will give you the names of the contractors who do the most business AND are current on their payments with the supplier.  You can try this at places like Lowe’s and Home Depot too.

–        Job sites – You get to see the contractor in action.  You can inspect their work and work ethic.  If the job site is trashy, that is a good indication of what your job site will look like too if you use that contractor.

–        Other contractors – Once you find a good one, ask him for referrals.  Good contractors tend to know other good contractors, just like bad contractors usually know other bad contractors.

Of course, there are many more ways than this, but these are some of our favorites.  At Memphis Invest, we’ve remodeled hundreds of houses over the last few years and our team of contractors is vital to our success.  In fact, some investors do everything themselves but hire us just to handle the investment property rehab because they know they cannot replicate our system.  Stay tuned for more but for now, drop us a comment about how you found your favorite contractor.

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Categories: Tips & Advice

In investment real estate, you either talk customer service or you deliver!

I had to laugh this past week at some posts I read online and an email that I received where the posters and sender were talking about the importance of customer service.  It reminded me of the fable where the boy continuously cries wolf when there is no danger and one day, no one believes him when he is really in danger.  Companies today love – and I mean LOVE – to talk about the latest buzz words.  When it comes to investment real estate in Memphis, TN., MemphisInvest.com is often the company setting those new buzz words.  It is times like these that we like to sit back and watch who follows and what spins they try to put on for the public.

In late 2009, MemphisInvest.com made a decisive effort to develop and deliver outstanding customer service.  Two new employees were hired and trained specifically to work with our clients in the area of customer service.  A formal plan was put into place and is followed to the letter today to ensure that our clients have access to the answers they  need from each department in our companies.  From purchasing property to the property management of those investments, MemphisInvest.com is committed to providing the best possible experience and fantastic service or our clients.

I recorded a video with Angie and Ashley of our customer service department and asked them to explain much of what they do each day to reach out to our clients.  I think you’ll like it….

Memphis Invest broadcasting live on UStream.TV

Let us know what you think of the video.  So going back to the children’s fable, companies will one day realize that simply saying you do something and creating a moniker about customer service will never be enough.  One day, clients will want you to actually deliver on what you say and great service requires a lot more than being a chauffeur and tour guide!

We love the feedback and we’ll talk to you soon!

5063 New Castle, Memphis, TN – Remodeled Single Family Home in Colonial Acres.

5063 New Castle, Memphis, TN.

5063 New Castle, Memphis, TN. Memphis Investment Property

This is a beautiful example of the work and craftsmanship that MemphisInvest.com puts into each of the investment properties it rehabs in Memphis.  While this particular property is being rehabbed for a future owner-occupant, the property showcases the care and attention to detail that the Memphis Invest Rehab Services team takes on each property.

This is a 4 bedroom, 2 bath single family home in Colonial Acres.  The huge

Beautiful Interior Colors and Finishes

shaded lot and fenced back yard will make a great home or a family looking for a quiet established neighborhood and a home with all the amenities of a brand new build.  The deck and portico in the back yard with covered swing are great features for families looking for privacy outside and space to play.  The interior has been completely refinished with brand new hard wood floors, custom paint colors on the walls and trim, smooth ceilings throughout, granite counters in the kitchen

Beautiful Kitchen comes complete with all appliances

and baths, showcase furniture pieces for bathroom fixtures, beautiful lighting and plumbing fixture packages that match throughout the home, updated electrical panels, brand new ceramic tile including custom laid tile in the bathrooms, new cabinets, new landscaping and an alarm system.

2 Bathrooms Custom Finished!

This property shows like it is brand new and with the spacious 4 bedroom layout and updated everything…it is ready to go today!

Contact Mark Saller today for a private showing.  1-901-831-7650.

Categories: Investment Properties

Real estate investing can be so simple – when you pay attention!

It never ceases to amaze me that business men and women alike can sometimes forget the very basic rules of investing when it comes to investing in real estate.  Real estate investing is no different that investing in traditional stocks, bonds, funds or CD’s when it comes to looking for value and return.  Often times, the real value of an investment can be determined quickly and easily and it has nothing to do with how steep the discount is!  It seems that today, many in the investment real estate business want to confuse complication with innovation!

I recently reviewed the financial analysis, or “cash flow analyzer” as some call it, that other companies use to showcase their properties and the financial advantages of the properties. I give most everyone the benefit of the doubt here and believe that the best interest of the individual investor is always the end game.

But when you look at the complexity of some of these “analyzers”, it raises the question of whose best interest is really being looked after.  It is easy to try and “quick talk” a buyer with lots of numbers and calculations and ultimately a positive conclusion that the property is a great buy. Often the details are murky and confusing at best and downright misleading at worst.  The property analyzers end up with all sorts of confusing conclusions and often are aimed at distracting a buyer form the solid, time-tested basics that they need to pay attention to when making an investment decision.

Even companies who specialize in cash flow properties can muck up the process of analyzing a property by trying to make it easier and only creating a bigger more confusing mouse trap! Real estate investors, especially those investing in hot real estate markets like Memphis, TN. need to realizing that the simple basics to investing have not changed, just the delivery of the information to the investors. In the end, a Memphis real estate investor only needs to focus on a few key elements of the deal to determine if it fits their criteria.

For the purposes here, we are going to assume that an investor has already determined that a property is located in an area they want to invest and that is has the proper number of bedrooms & baths and other amenities.  As obvious as it sounds, this is where solid investing starts.  Only look at properties that meet your criteria for location, size, amenities and the basic comforts that they will provide to a renter.  Once you have determined that the property meets those criteria, here are the questions you must ask:

1. What is your immediate exit strategy?

Some companies will assist you with determining exit strategy before you get started.  If you are not dealing with a company that gives you a little direction, then make sure you have thoroughly considered what your immediate and long-term strategies are for investing.

When investing in a city like Memphis, TN., the long-term benefits of investment property ownership is a major factor in exit strategies.  Today, a majority of investors are purchasing investment real estate in Memphis for monthly cash flow and long-term appreciation while a renter reduces their principle. This allows an investor to capture long-term tax benefits, appreciation and monthly cash flow.

2. Determining Cash Flow

If you are purchasing your property for all cash and holding for a return on investment, then skip directly to #3. However, since most of us purchase properties with some sort of financing attached, this is where you want to slow down and really pay attention. This step refers directly to those who are putting a long-term mortgage on their property and having a renter make the monthly payment.  Passive monthly cash flow in its simplest form is the amount of rent received minus the monthly note. As an investor you need to take into consideration certain costs that you will most likely incur. Property management fees, taxes, mortgage interest, rainy-day funds, etc… There are many places to look online for copies of sample cash flow calculators which help you to breakdown cash flow after PITI (Principle, Interest, Taxes, Insurance) and property management fees. Be aware what monthly cash flow really means and how much to put away for future needs such as vacancy and maintenance.

3. Cash on Cash ROI

Again, try to keep this calculation very simple. You divide net rental income (rents minus taxes, insurance and set% for vacancy & maintenance) by total investment (purchase price, rehab costs, closing costs).  Most savvy investors understand this NET Cash on Cash Return On Investment and recognize that a property with a double digit return after expenses is much better than the 2% return from the local bank CD.  Every investor is different and every investor has different criteria for location, size & amenities that they want their properties to include.  As long as the property meets those criteria and you are happy with its location, don’t allow a lot of calculations and fancy looking spreadsheets to confuse or impress you. Stick with the basics and keep it simple. Calculate your cash flow or return on investment and purchase properties that give you the return you are looking for!

Chris D. Clothier

Co-Owner of MemphisInvest
Director of Sales & Marketing
chris@memphisinvest.com.
1-901-751-7191 Local
1-888-771-9998 Toll Free

Chris is an experienced real estate investor who has assisted hundreds of investors with purchasing over 700 homes in the last 5 years. Today, he resides in Memphis  and operates one of the largest turn-key investment providers in the nation, http://www.MemphisInvest.com.  This family owned and operated company continues to assist investors nationwide with developing their wealth building portfolios, by selling, rehabbing, marketing and managing 20-30 new properties each month.

Categories: Tips & Advice