HOUSINGNEWS REPORT
SPOTLIGHT: MEMPHIS
But only 8.1 percent of homes flipped in Memphis went to FHA buyers, typically first-time homebuyers, despite the market’s reasonably priced homes — median home prices were $112,900 in the first quarter of 2017, well below the national median of $225,000. The 8.1 percent of flips going FHA buyers in Memphis was less than half the national average of 19.2 percent and fourth lowest in the country behind the high-priced markets of Honolulu and San Jose as well as Raleigh, North Carolina, another flip-to-rent hotspot. Many of the remaining home flips not sold to FHA buyers are being sold to rental property investors as so-called “turnkey rentals.”
center because of the potential high rents compared to purchase price. Property can be purchased here for a very reasonable price,” said real estate attorney Joseph T. Kirkland, president of the Memphis Investors Group. “There are good investment pockets in all areas of the city, and there are bad investment pockets in all areas. We have turnkey providers who specialize in certain areas.”
and then offering it as a complete turnkey package to rental investors.
“Housing was affordable and well- maintained. Much of it built in the ‘60s, ‘70s and ‘80s. Well-built, inexpensive and had rental demand,” said Clothier, a partner at MemphisInvest. “Memphis had this perfect mix of affordable market with good housing stock.” According to the 2010 U.S. Census, 250,000 out of the 292,000 total housing units in Memphis city were occupied — approximately 130,000 (51.9 percent) were owner-occupied while 120,000 (48.1 percent) were renter-occupied.
Chris Clothier is in the thick of the flip-to-rent boom in Memphis.
Instead of the more traditional process of buying, fixing and flipping properties to owner-occupants such as FHA buyers, Clothier’s family — which has been in Memphis for 14 years — took the next logical step, identifying and placing a renter in the property, managing and maintaining that property
The share of investor purchases has trended higher in recent years, according to an analysis of public
Turnkey Rental Central “Memphis is and has been for quite some time now a very large turnkey
THE MEMPHIS HOME FLIPPING TWIST SHARE OF FLIPS SOLD TO CASH BUYERS SHARE OF FLIPS SOLD TO FHA BUYERS
Memphis is and has been for quite some time now a very large turnkey center because of the potential high rents compared to purchase price.”
70.0%
60.0%
50.0%
40.0%
30.0%
JOSEPH T. KIRKLAND PRESIDENT, MEMPHIS INVESTORS GROUP
20.0%
10.0%
0.0%
16
JULY 2017 | ATTOM DATA SOLUTIONS
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