Mid South Home Buyers with Terry Kerr

Terry Kerr is the President of Mid South Home Buyers and is a full-time real estate investor who has flipped over 1,000 houses. This week he was kind enough to answer some questions about being a turnkey provider and he offered some highly valuable information for those looking to invest in turnkey properties. Mid South Home Buyers also owns its own property management company and specializes in turnkey renovations.

Terry says that he was lucky to be born in Memphis, a great place for investment properties. And he became a turnkey provider for investors because he was rehabbing a house in Memphis, TN, his second rehab house ever and he ran into a friend he hadn’t seen in a long time who mentioned he had rental properties. The friend visited Terry's rehab home and asked if he could buy the house for $43,000 and although that meant Terry would only stand to profit $3,000 from it, he knew he could use the money because there was a house across the street he wanted to buy whch would net him $7,000.

Terry asked his friend why he’d buy it from me when he already knows how to buy and fix homes and he said he didn’t have enough time and that’s when he realized he wanted to make a biz of providing turnkey properties to other investors. It doesn’t take much time when you use a turnkey provider and he can do it cheaper because of my years of business and the prices and connections he has for labor and products. In 2006 he bought, sold, and rehabbed 38 houses and before that he was hiring subcontractors. After 2006 he gained momentum and hired his first employee and has been going ever since.

Mid South offers a 1-year 'bumper to bumper' warranty on their homesand installs new or like new appliances, reaplces the roof if it's past three years old,etc. Terry says he doesn’t rehab a house to any standard below what he’d live in. He shared that the beauty of turnkey is you buy the house, they handle the managing of it and you receive a check every month.

He's found success with his formula because he says he enters every job with the mentality of wanting everyone who was in on the deal to walk away saying they’d want to do that again. So you don’t try and ring every last dime out of the deal and that the name of the game is how fast can I make money, not how much can I make it? Fortunately for Terry, he doesn’t have a lot of turnover and his buyers, contractors, and employees have been with him for years. 

On the Mid South Home Buyers website you can download a free report that you can use as an interview tool when you’re interviewing turnkey sellers in any market and it will garner you the answers you need. Terry says there are several things you need to look for, but property management is where the rubber meets the road. Make sure your property management company is owned by the same outfit that’s managing the property. Keep all the accountability under one roof and you won’t have to worry about finger pointing. Property management companies can impact your return, so make sure the market rent is set to a price point where tenants want to renew their lease.

Mid South sets their rent slightly under market, maybe about 5%, because keeping the property occupied and reducing turnover is the name of the game. Management companies profit from turnovers, higher rent, etc but the investor doesn’t. Download and read the due diligence report, here.

For those who want to purchase from turnkey providers like you, only 5% of the people we work with come to visit us. Even if it means flying in, check out the outfit you’re buying from. Spend a day seeing what they do, what their books read, if they don’t pull back the curtain, there’s a problem. Carve out a day to face to face visit with the turnkey seller you work with.

For more information, contact Liz, the director of marketing and investor coordinator of Mid South at (901) 217-4663

Check out http://midsouthhomebuyers.com/ and the numerous resources available, including the Get Rich Education podcast.