Memphis Rental Property #16
Last updated: 2026
NOTE: This article was published in 2026, but I bought the house way back in 2019. Check out the Annual Updates at the bottom of the article to see how the property has performed since then.
Say hello to Property #16 in my Memphis rental portfolio! (This is the last of 25 Property Spotlights I have published — my collection is complete!)
In case you missed it: this was one of the 14 I houses I purchased very quickly from May to September of 2019 — my opening acquisition sprint after I left my “first career” in retail, sold my NYC condo to become a renter, and used the proceeds to start building a portfolio that would generate real cash.
This is a newer home, built in 1997, and it’s a cute one located in a desirable B neighborhood. It’s also the second house in my portfolio on a street with “Pecan” in the name…which I guess is a giveaway that we’re in the South.
Alright, let’s take a closer look at this house and deal!
Property #16: The Deal
This was an MLS deal. It was listed at $103,000, and I made an offer at $100K which was accepted. There was a tenant in place paying $925/mo., who had lived in the house for about three years. I felt this was a bit below market rent, so I figured my long-term numbers were actually a bit better than they looked using $925 as the rent.
The house looked great, and was perfectly situated on a cul de sac. The tenant kept the property up nicely. I noticed that there were carpets through most of the home, which I knew I would replace with LVP at the first turnover.
Here are some additional facts about this particular house:
3-beds, 2-bath
In the 38128 zip code, nice B neighborhood
Built in 1997
1,307 square feet of interior space
Central air
2-car attached garage
Unincorporated area (making it county-only taxes, no city taxes — which is a nice bonus)
Property #16: Due Diligence
The inspection on this house was pretty clean, though it did turn up a few issues that I wanted to address. I pointed these out to the seller, and asked that they make the repairs or credit me the associated amounts:
section of fence needs to be reattached. ($500)
garage door control button has to be held down in order for door to shut all the way. ($500)
dishwasher not functioning ($1000)
hot water valve for master bath sink does not shut off correctly. ($500)
This seller preferred to make those repairs rather than offer a price concession. Within a few weeks, I had confirmation that all the repairs had been made, including installation of a new dishwasher.
The appraisal came in at $108K, easily above the purchase price.
Finally, the tenant ledger indicated that the tenant sometimes paid late. This is always a bit concerning, but there were no red flags (such as returned payments or getting behind by 2 months), so I felt comfortable enough to move forward.
Unfortunately, I don’t have a set of good photos of this property. Here’s a couple from my inspection report just to give you an idea:
Property #16: The Financials
As with Properties #14 and #15, I had used up all my “golden tickets” so I no longer had access to conventional mortgages. I moved on to the next-best option, which were nonconforming rental loans — now usually called DSCR loans. It was still a 30-year fixed rate loan, but rates and terms were not quite as attractive, so my interest rate on this loan was 6.35%, and closing costs were quite a big higher than my previous conventional loans. I put down a 25% down payment.
As I mentioned earlier, the inherited tenant was paying $925. Using the RIA Property Analyzer, I’ve modeled the original figures from this deal, so you can see what it would have looked like at the time:
Purchase Price: $100,000
Monthly Rent: $925
Monthly Cash Flow: $134
Cap Rate: 7.2%
Cash on Cash Returns: 5.1%
Total ROI 2% Appreciation: 14.1%
(Want to use this calculator? It’s free!)
OR
Using the multi-year model in the RIA Property Analyzer, we can visualize some of the main long-term trends assuming a long-term inflation rate of 2%:
Cash flow increases over time. This is mostly because rent and expenses are expected to rise with inflation, but one major expense (my mortgage) is fixed.
Cash Flow Year 1: $1,612
Cash Flow Year 10: $3,022
Cash Flow Year 25: $6,009
Mortgage paydown accelerates over time. This is because of the way banks amortize loans – each month, a little bit more of your fixed payment is principal, and a little bit less is interest.
Mortgage Paydown Year 1: $858
Mortgage Paydown Year 10: $1,521
Mortgage Paydown Year 25: $3,948
Total returns on cash increases over time. This is a consequence of the first two graphs – I will make greater total returns over time on the same initial investment of cash.
Total Returns on Cash Year 1: 14.2%
Total Returns on Cash Year 10: 22.1%
Total Returns on Cash Year 25: 41.9%
Like Property #15, this house was a solid deal on a newer build in a quality area. While the returns aren’t spectacular, they’re solid — and I liked that expenses were low on the house (especially county-only property taxes). Plus, I believed I had upside on rent.
Property #16: The Deal Sheet
Finally, to sum up Property #16 and its financials, here’s the full “deal sheet”:
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Annual Updates
For all Property Spotlights, I come back at the end of each year to provide a brief narrative of what happened at the property that year. I also update my annual and cumulative figures for the property, including cash flow, equity growth, and occupancy.
2019
Everything went smoothly after closing in September, and I managed a positive cash flow of $1.1K for the year.
2020
Smooth sailing. The tenant renewed at $945/mo., and maintenance was low ($600 for two toilet issues, and a garage door fix.) Cash flow for the year was $4.3K, more than double my plan.
2021
Another boring, excellent year. The tenant signed on for another year at $982/mo., and maintenance was very low again at just $300. Cash flow landed at $3.6K, and home values increased sharply (as they did nearly everywhere this year.)
2022
The tenant vacated at the end of their lease, saying that their family had outgrown the house. So I turned the property over, spending about $4.6 K for paint and other M&R, and another $4K in Capex for LVP (luxury vinyl plank — much of the home was carpeted before.)
Given the steep rent increases that had occurred in the past few years, and the improvements I made, I had room to go for a higher asking price. I decided on $1,395/mo., and we were able to find a tenant at that price who moved in August 1st on a 2-year lease. But with nearly $6K in maintenance spend, and several months without rent, it was still a down year with negative cash flow of $3.0K.
2023
No renewal this year due to the tenant’s 2-year lease. I had $700 in regular maintenance, and $7.1K in cash flow. (That higher rent makes a big difference!)
2024
I judged that the tenant was at market rent, so I decided to offer another year with no increase ($1,395/mo.), which they accepted. Repairs ran ~$900 this year (mostly plumbing, as it turns out), and cash flow was again just north of $7K.
2025
After three years, I decided to increase the tenant’s rent, but only slightly to $1,425/mo. I never want a tenant to feel they’re paying above market rates, because it makes them feel cheated — I want them feeling like they’re getting a fair deal.
Repair costs were ~$800 this year, including HVAC, plumbing, and dryer vent issues. Cash flow $7.7K, bringing me to a $4K surplus over my expected cumulative cash flow so far.
About the Author
Hi, I’m Eric! I used cash-flowing rental properties to leave my corporate career at age 39. I started Rental Income Advisors in 2020 to help other people achieve their own goals through real estate investing.
My blog focuses on learning & education for new investors, and I make numerous tools & resources available for free, including my industry-leading Rental Property Analyzer.
I have also served as a coach to over 100 private clients starting their own journeys investing in rental properties, and have helped my clients buy millions of dollars (and counting) in real estate. To chat with me about coaching, schedule a free initial consultation.
Property #16 in my Memphis rental portfolio is a cute 3/2 built in 1997, and sits in a quality B neighborhood. It has been a steady, strong performer in my portfolio.