Is a $146K Memphis Turnkey Worth It for Investors
Would you pay $146K for a Memphis turnkey rental in 2025? In this episode, we break down a real investor’s real-world experience buying three turnkey properties—one of which is in Frayser, a fast-changing Memphis neighborhood. This isn’t just talk—we run the numbers on cash flow, dive deep into the 1% rule, and get into the weeds on rent estimates, Section 8 income, and real maintenance costs like termite treatments and insurance premiums. You’ll get the hard truths behind turnkey real estate investing, why some upfront costs make financial sense, and how one couple built in smart risk mitigation while scaling their portfolio. If you’re wondering if turnkey rentals are still a good passive income strategy with higher interest rates in 2025, this episode gives you the numbers and experience to help answer that question.
This episode kicks off with a deep dive into the realities of purchasing turnkey properties in today’s Memphis real estate market. Kevin, an experienced investor, discusses why he and his wife chose to pay slightly more for turnkey homes instead of taking on fixer-uppers. Their rationale? Smart investors focus on long-term ROI, and that often means buying rent-ready homes with low future capital expenditures. Kevin emphasizes the importance of features like LVT flooring, basic but durable upgrades, and builder warranties that drastically reduce maintenance costs in the early years. We walk through the importance of ensuring your property is tenant-resistant without over-investing in luxury finishes that offer no added rental value in markets like Frayser.
We also focus heavily on understanding and applying the 1% rule in real-world Memphis properties. These turnkey homes were acquired for $146K, $146K, and $153K respectively, with projected MHA rents between $1,450 and $1,600. Kevin explains how he built his own spreadsheets, analyzed operating costs, and compared quotes for insurance and property taxes to identify the most profitable options. He lays out the breakdown of costs including management, maintenance, vacancy reserves, and capital expenses. This real math shows whether or not these deals make sense and how Frayser’s emerging market status plays into long-term appreciation potential.
Then, we break down the importance of investor mindset and risk tolerance in building a rental portfolio. Kevin shares lessons from 18 years of experience, including how he learned to trust but verify contractors, why termite treatments are worth every penny, and how he builds a rainy-day fund to self-insure against big repairs. We compare the pros and cons of home warranties and the value of working with real estate professionals who give honest, experience-based advice—not just sales pitches. Whether you’re a seasoned investor or a first-timer, these insights into budgeting, due diligence, and risk management will give you the confidence to move forward smartly.
In this Is a $146K Memphis Turnkey Worth It for Investors episode:
- Turnkey vs Fixer-Upper – Turnkey properties come at a higher upfront price but can offer substantial long-term savings by avoiding major repairs in the first few years. Kevin’s strategy involved buying newly rehabbed homes with MHA tenants already placed, reducing vacancy risk and maintenance surprises. These aren’t luxury flips—they’re functional rentals with replaceable components designed for longevity, making them ideal for long-term passive income.
- The 1% Rule and Real Cash Flow – Kevin shows how properties at $146K to $153K still qualify under the 1% rule with Section 8 rents ranging from $1,450 to $1,600. After factoring in insurance, property taxes, management fees, maintenance, and reserves, these investments yield real monthly profits. It’s not about wishful thinking—Kevin’s spreadsheets and reserve planning offer a masterclass in disciplined rental investing.
- Section 8 and Memphis Markets – Frayser may not have been investment-worthy five years ago, but in 2025, it’s on an upward trajectory similar to Raleigh’s rise thanks to corporate growth from Amazon and Nike. With homes still under $150K and solid rental demand, investors can expect appreciation and strong rent performance. Kevin and his team analyze rent trends, local development, and future value projections to identify deals before they become mainstream.
- Maintenance, Termites, and Smart Spending – From LVT flooring to $500 termite treatments, Kevin highlights how being “penny wise and pound foolish” can destroy ROI. Preventive measures protect profit margins and preserve property value. His approach to verifying advice with neutral parties ensures smarter decisions—and fewer regrets.
- Warranties vs. Oh Sh*t Funds – Some investors opt for home warranties, while Kevin prefers to self-insure with reserves. He outlines when a warranty might make sense—especially for new investors—and when it’s better to allocate funds toward repairs directly. Know your risk tolerance and factor everything into the spreadsheet.
Investing in real estate in 2025 isn’t just about buying properties—it’s about buying right. This episode lays out a crystal-clear blueprint for doing just that. Kevin’s experience buying three turnkey properties in Memphis proves that smart investing isn’t about finding the cheapest deal, but about understanding long-term value. He makes a compelling case for paying a bit more upfront to avoid massive expenses down the road. Whether it’s $500 on termite treatment, budgeting for HVAC replacement, or choosing Section 8 renters for stable income, the lesson is the same: plan ahead, and you’ll profit later. His use of spreadsheets, cost analysis, and market trend research offers a level of discipline many investors skip—and that’s exactly why his investments work. The Frayser neighborhood, often overlooked, emerges as a smart play for those looking ahead instead of behind. With rents still climbing and homes still undervalued compared to Raleigh, Frayser presents an exciting opportunity for appreciation and strong ROI. Add to that a focus on risk mitigation, proper budgeting, and strong relationships with honest contractors and realtors, and you’ve got a strategy anyone can learn from. This isn’t hype—this is how you build passive income that lasts.
About 5 O’Clock Somewhere Real Estate Investor Podcast
5 O’Clock Somewhere Real Estate Podcast throws out the script, brings common sense back to real estate, and has casual conversations about the one and only market that matters – Memphis! We’re not interested in what some real estate expert from California has to say because we know the truth: Memphis is where the smart investors put their money. Forget about Vegas, Nashville, and the rest of the country, Memphis is the blue-chip stock of the real estate world. We’ll tell you everything you need to know about why Memphis is the safest and hottest place to buy rental real estate, and how you can be a part of a smart investment.
If you would like to join the conversation, participate in an upcoming recording, or just call to bounce ideas off one of our team, you can call or text us at 901-692-7401. Or if you prefer send us a message.
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