Meridian: There are 366 metropolitan statistical areas that we studied before we started this business. And looking at “where would you invest If you could invest in any market in the country, where would you invest?”
Memphis had a very, very strong economic base. Home to a number of Fortune 500 companies. One of the largest being FedEx. What that’s done is bring a huge diversity of industry into Memphis markets.
Meridian: They say that that airport and all of the jobs that it creates are directly or indirectly responsible for one out of three jobs in that economy.
So anything from medical to shopping to transportation all runs its basis out of FedEx, which makes it very recession-proof.
Meridian: What we like about Memphis, in particular, is the rent ratios on the properties are very good. We’ve also found that maintenance, because it’s not in a cold-weather area, because it’s not in the coastal areas, it’s not in a hurricane zone, we don’t invest in flood zones. Maintenance is not a huge factor in mind.
It’s a very affordable place to live, both from wages and the cost of housing.
Meridian: For example, you know I looked at places in Texas and found that you know, property taxes are three and a half percent. And you’re around one to one and a half percent in Memphis, so you can get a very similar property in Memphis at a much lower tax rate.
To sum it up, Memphis is a great place to invest because of these low vacancy rates, low maintenance rates, very competitive cost points, as well as a strong economic center. We’ve got an experienced acquisition team that’s out hunting for properties in the right neighborhoods at the right price points for them.
Once we find that property, our renovation crew will go out in and renovate that property. We’ve got some very stringent standards that they have to adhere to. When they complete it, we turn it over to our property management company who places a quality tenant into that property. At that point, we’ve got a working asset, and only at that time will we sell that asset to a client. We want to make sure they understand that, you know, we’re selling something that is real, is complete, and is working. So we can actually show the existing returns on this property.