Part 1 - My Journey to REI...How I Decided on Turnkey

I want to begin documenting my journey in purchasing our first REI property. Hopefully this will not only help me better understand why I am doing what I am doing, but also help other people get started.If you have recommendations or questions for me please leave them in the comments or send me a PM

I guess I should start this out talking about who I am just a little. My wife and I are both active duty in the Air Force with no kids. Our goal is to spend another 11 years in the Air Force and retire with high enough income in retirement or low enough standard of living to not have to get another J.O.B. This doesn’t mean we don’t want to work, we just never want to feel like we HAVE to work.

My journey to REI really began about a month ago when my wife and I were on vacation in Chile. We love to travel. Actually, more accurately, we LIVE to travel. That’s what we would do if we weren’t working. I started listening to a Podcast about passive income on our drive through the Chilean Patagonia, and started brainstorming. What could I bring to market that would create passive income so we could travel whenever we want? I feel like I am a relatively creative person with good ideas, but I have yet to come up with anything worth selling to anyone. One Podcast, in particular got my attention. The person on this Podcast was discussing the subject of Buy-and-Hold REI. That’s when the light bulb went on.

When we got back home all I could think about was how to get started. I get pretty amped up about things and usually want to make decisions on emotion rather than spending my due diligence researching and “sleeping on it”. I have at times had this urge over the last month, when I see that property I think will create a decent ROI/Cash Flow. I am definitely glad I haven’t yet, because what I thought would’ve been a positive cash flow would most likely have been negative after learning about CapEx and vacancy rate and when really doing due diligence on the rental market in the area rather than finding one comp in the price range I wanted to get.

I work with someone who I knew was already pretty involved with REI so I started talking to him about my newly discovered passion. He quickly turned me on to BP. So far the biggest help throughout my journey has been the forums and blogs on BP. Also the BP beginner’s course was a tremendous help. If you are starting out in REI and not listening to the BP Podcast on the way to and from, when you take the dog out for walks, or when you are going on your run at lunch, then you are wasting that time. I am now in the process of reading the BP book “The Book on Rental Property Investing” and I can’t put it down when I start reading it.It’s not only very informative, it’s very well written and entertaining. Right now, a month into my journey, I am still having that itch to buy something now. However, than itch is slightly being overtaken by the desire to learn as much as possible about making a smart investment first.

Developing my strategy and niche has been another journey. I know I wanted to start with buy and hold based on our goals to supplement our retirement income in about 11 years when we retire. My wife and I have discussed buying a vacation property for a while so short-term rentals have been something I’ve looked into. When I sit down and think about everything that would go into this it seems like a lot of work getting to set up a fully furnished place and to constantly turn new tenants. Even with a property management company, it just seems like a lot of work. I also started looking into SFHs around the Colorado Springs area where we live, but haven’t found properties I can get the numbers to really work on. Another niche I’ve looked into is SFHs in markets I am familiar with, but currently not within driving range.The numbers worked a little better in some of these markets but not being able to see the house and doing everything required to acquire and fill a property out of state seemed daunting for my first REI purchase.

I probably bounced back and forth on the above niches multiple times, but one niche (not mentioned above) seemed to standout, and I think I ready to peruse it on the next level. This niche for us is turnkey properties. These give us the potential to create the extra income in 11 years, using properties in markets with good buy/rent ratios, with a lot less headaches of other niches. Turnkey is not without its own set of issues and I understand that we still need to do our due diligence when deciding on the turnkey company we use, the market we buy in, and the house we chose to purchase, but in our current circumstance it has stood out as the niche that we should explore.

I’ll end the first post here. In the posts to follow I’ll focus on our journey to find the right company to work with, selecting the property, and deciding on the financing for it. Again please feel free to comment or PM me if you have any suggestion or questions.