Real Estate Investment FAQs

Am I responsible for repairs to the property?

You are financially responsible for all repairs to the property. If you use our partner for property management services, Marathon Management, we will use our repair contractors to complete all repairs. If you choose to manage your property yourself, you will physically be responsible for completing repairs yourself or for hiring someone else to do the repairs.

What is ARV?

ARV stands for After Repair Value. It is the value after all renovations and repairs have been completed. You calculate the ARV by adding the value of renovations to the current value of the property.

What are the tax benefits of investing in real estate?

There are a number of tax benefits from investing in real estate. You can take advantage of these benefits from both being the property owner and also renting the property out. You can usually deduct the interest you pay from buying and fixing up the property. You can also usually deduct a large number of expenses, such as repairs, depreciation, taxes, etc.

Do I need money in hand to invest in real estate?

You typically need to have money in hand when you want to invest in real estate, but it doesn’t necessarily have to be your own money. It is possible to borrow money from a private money lender in order to fund your real estate transaction. Keep in mind that a private loan will come with fees and interest.

Is real estate investing risky?

Just like investing in anything, there is going to be some inherent risk when investing in real estate. There is no guarantee, but real estate investing tends to have less volatility than other forms of investing, such as with the stock market. Some of the big risks include your property being vacant if you need to sell the property in a down market, and pricey maintenance and repair costs.

What if the tenant causes damage to my property?

This is probably one of the most asked questions about renting out your investment property. Before a tenant moves in, they will pay a security deposit. This deposit will be applied to any damage the tenant causes to the house when they move out. You usually will allow for normal wear and tear, but the expectation generally is that the house should be in the same condition it was when the tenant first moved in.

How do you determine the rental rate for a rental property?

The professionals at Memphis CashFlow will help you to determine what you can fairly charge as rent through doing area comps. If you set your rent too high, there is the possibility that your property sits vacant for an extended period of time. If you set it too low, you might have negative cash flow.

How long does it take to find a tenant?

It typically takes around 30 days to find tenants for a rental property. If there are repairs or renovations that need to be done, that time can be a little longer. One of the great things about purchasing an investment property from Memphis CashFlow is that the repairs and renovations have typically already been done by the time we put it up for sale! Sometimes there are already tenants living in the house.

Who will manage my investment property?

You are welcome to manage your own property if you would like, but we offer property management services through our sister company, Marathon Management They will handle all aspects of property management from start to finish, including screening tenants, filling vacancies quickly, handling repair requests, and collecting rent money.

What happens if my tenants move out?

This is inevitable when you own a rental property. The goal is to get tenants back in the property as quickly as possible. Marathon Management will handle any repairs that need to be done, including a deep clean of the house. They will then find new tenants, collect their deposit, and get them under contract and in the rental property.

Do I need a real estate agent when buying an investment property?

It is recommended that you work with a Realtor, especially if this is your first investment property purchase. A real estate agent will make sure that you comply with all of the requirements of purchasing a property, negotiate the deal, help schedule the closing, and much more. The professionals at Memphis CashFlow will help you through the entire process, making sure you are taken care of.

What if I want to sell my investment property?

Whether you have a big life event, or if you stand to make a huge profit by selling your investment property, there will likely be a time when you need to sell your property. The first thing you should do is talk to your real estate agent. They will walk you through the home selling process from start to finish. Contact the professionals at Memphis CashFlow to get started!

How do I finance the first real estate deal I find?

It might be a little harder to get funding when you are just getting started in real estate investing, but it isn’t impossible. You can usually get a conventional or FHA loan that is tailored to investment properties, but you need to be prepared to usually put at least 10 or 20% down.

What is capital gains tax?

Capital gains tax is a tax that is owed when you sell a property for more than you bought it for. There are two different types- short term and long term. Short term is if you own a property for less than a year and then sell it for a profit. Short term is taxed at a higher rate than long term. Long term capital gains taxes are much more favorable and are considered long term when you have owned the property for at least one year.

How do I get started in real estate investing?

The first step is to figure out how you are going to finance your first property. After you get your financing in place, Memphis CashFlow can help you from there. We have a number of properties ready for purchase- some even with tenants already in place! We will help you through the real estate investing process, from start to finish.

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