Coastal cities have been attracting real estate investors for several years because these cities performed better during the recession compared to inland cities. The result is that today, coastal properties have skyrocketed in cost due to the huge influx of investors and are no longer ripe for the picking.
Whether you are a seasoned investor or just getting started, the secret to your success is picking the right market to invest in. Seldom is that in your own back yard. Today, inland real estate investments such as Memphis, offer lower prices, positive cash flow, high equity positions, and a large selection of quality renters to choose from.
Putting Together a Memphis Investment Team
You may be an expert at real estate investing but you're not an expert on the Memphis market. It would be wise to have a local professional team working on your behalf. Start by finding a local wholesaler that knows the best neighborhoods to invest in. A wholesaler will make a small profit on the transaction but will not only find you the best investment property, he or she will leave plenty of meat on the bone for you.
Other team members you want to consider are a reliable contractor if the property needs repairs or updating and a local attorney if you will be using creative financing. Your financing source doesn't have to be local, regardless if you're using a traditional mortgage, a hard moneylender, a bridge lender, seller financing, or other financing source but they will be more comfortable if you have a local professional team in place. Your other local key team member is a property manager to screen, qualify, and place a quality paying tenant into your home to provide you with maximum cash flow.
What Makes the Best Memphis Investment Property?
Memphis has one of the highest percentages of renters in the nation. But that doesn't mean quality renters don't want to live in a nice house in a good neighborhood. The investment property you want to buy should be in a safe, secure neighborhood, close to shopping, have good schools, and other amenities such as entertainment that are desirable to tenants.
One reason quality renters choose to rent is because renting allows them flexibility in where they live and they can easily change their mind. For that reason, you need to avoid run-down, high crime areas, and look for white picket fence areas where people that pay their rent on time are living. One last important consideration in the Memphis rental property market is staying with houses that are at least 1,000 square feet, with 3-bedrooms, and preferably two-bathrooms.
Using a local team to find a wholesale property and placing quality renters in a good neighborhood is your recipe for success with out of state investing in the strong Memphis rental market.