Memphis, Tn
I have been looking at the Memphis market. This will be my first venture into buying a complex, so I dont want to get into anything big. (I am dealing with California money) I have my eyes on one two-unit complex.
Has anyone else heard about the Memphis economy growing? thx
thanks for the info.
>a custom home very close to a lake at Dancing Bear Ranch
I am very curious about this...can you tell me more? Lot price? Size? View? What others are building in the area? What you think appreciation will be here?
Thanks for any information!
Thanks Bnwbaron,
I definately have to find a good tax lawyer or CPA that specializes in RE!
So if I understand you right, you sold one house and leveraged 3 others using a 1031 and only had to pay 10% for all 3 not each?
It sounds like you are all over the map. Personally, it would make me uncomfortable to be looking at properties all over the USA if I was tied to a job with traditional hours. I would be very concerned that you are adequately performing the due dilligence required on out of state properties but as long as you are doing the full due dilligence you may be ok. Of greatest concern to me, beyond the physical condition of the properties, is the condition of the local market. There is no national real estate market...bubbles and fall outs are localized and tied to local economies. Make sure you really understand what condition the local economy is where you are buying. This will make or break your appreciation. 8% cap in a stagnant economy is a bad deal. 8% cap in a booming economy and appreciating area can be a good deal though.
If it were me, i would try and focus on one area. Managing multi unit apartments is an entirely different ball game than land developing. Land development is the field of professionals and it requires professional attention to be successful. Amatures can muck their way through owning apartments, but make a couple of wrong decisions in land development and you will see how quickly you can loose your shirt.
Keep working towards your goals. Minimize your risk as much as possible. Keep a nest egg of reserves to keep yourself afloat in bad times. if you over extend yourself and things turn for the worse, all your equity will not help you when you need it most.
Be a goal setter and dreamer, but keep your feet on the ground and be realistic.
MANY markets in California are cooling down big time. To be banking on equity, in my opinion (RE/Loan agent), I would not hold onto my negative cashflow homes. Also open up an equity line to help with some freedom on the loans. Good luck
I would try to build up as much cash flow as possible so that I could leave my 9-5. I would think that you need to get rid of some if not all break even or neg cash flow properties.
Just think if you could get the 60+ unit under contract now and then close in about 4 months. Just before closing, you sell your CA properties and 1031 them all to buy the 60 units. You should have quite a decent cash flow by taking all your profits and putting them into one apartment complex. If you are buying the property at a good price and cap, you should have several thousand a month cash flow from something where you have nothing coming in now. That one move could get you to where you want to be in just a couple of years instead of 10.
Read up on the 1031.
Maybe this will help:
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=467
and
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=1028&mode=thread&order=0&thold=0