Turnkey property for first-time international buyer
Member since 2019 · 7 posts · 2 votes
Turnkey property for first-time international buyer
Most Popular Reply
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
4yQuote from @Mustafa Nemat Ali:
Hi there - I'm a German citizen currently living and working remotely in Asia and would like to invest in US property. Not looking for any get-rich-quick schemes but rather modest rental yields and capital appreciation to achieve a decent ROI on the property. I would like to start off with a property under $100k which will be paid in full by me without any mortgages etc. Any suggestions on what locations/markets to look at? Any recommendations/suggestions for a turnkey company? Thanks in advance! Mustafa
Welcome aboard my man. Many markets available that will get you where you want to go. Cleveland is the one I work in and it's also very popular with long distance investors because it's uber cheap. So I figured you'd get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama. Those market would also fall in line with what you are looking for.
In addition there are tons of other turnkey markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors
- Cincinnati, Ohio
- Dayton, Ohio
- Toledo, Ohio
- Youngstown, Ohio
- Cincinnati, Ohio
- Memphis, Tennessee
- Saint Louis, Missouri
- Indianapolis, Indiana
- Detroit, Michigan
- Erie, Pennsylvania
- Louisville, Kentucky
- Milwaukee, Wisconsin
- Jackson, Mississippi
Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.
One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.
- Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
- Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
- Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
- Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
- Make sure your property manager is a licensed real estate brokerage.
- Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
- Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.
25 Replies
- Bay area, CA · Member since 2021 · 383 posts · 306 votes4y
Hello Mustafa,
You have the right mindset. With the right people, it is possible to invest in the USA being an international buyer. However, good properties under $100K prices are tricky to find, especially in an emerging neighborhood. If you are young, leverage is a great tool to boost net worth.
Message me and I will share some of the contacts of turnkey providers I trust.
--Ruchit
- Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes4y
Check out the midwest and southern states. The price point are lower and these states will have landlord leaning laws. Would you plan on buying cash or were you looking to find a way to leverage? I would suggest leveraging if possible.
- 4yMackaylee BeachPro MemberReal Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 492 votes
@Mustafa Nemat Ali We may have to go a little beyond the 100k in KC to limit any future expenditures... but I still think it is a great option! Would love to connect.
- Member since 2019 · 7 posts · 2 votes4y
Quote from @Seth Young:
Check out the midwest and southern states. The price point are lower and these states will have landlord leaning laws. Would you plan on buying cash or were you looking to find a way to leverage? I would suggest leveraging if possible.
I am looking to buy on cash for the first one and then leveraging for the second one... Thanks for suggestion on states, if you have specific in mind would love to hear more from you :)
- Member since 2019 · 7 posts · 2 votes4y
Quote from @Mackaylee Beach:
@Mustafa Nemat Ali We may have to go a little beyond the 100k in KC to limit any future expenditures... but I still think it is a great option! Would love to connect.
Thanks! Yes, let's connect for sure :)
- Member since 2019 · 9 posts · 1 vote4y
Is it even possible to buy a property in cash as a foreigner under your own name without having to register an LLC due to taxes purposes because you won't have a SSN?
- Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes4y
@Mustafa Nemat Ali I would suggest looking in Memphis or LR, Arkansas. Also, the team you work with is equally as important the market you decide to invest in. You want to work with a team that has a trustworthy and reliable reputation, especially when investing from outside of this US. Dig into the bigger pockets forums and check out the review of turnkey providers before investing. Feel free to direct message me if you have questions.
- Rental Property Investor · Orange County, CA · Member since 2016 · 512 posts · 374 votes4y
please visit the neighborhoods where you want to invest before committing to any purchase.
As @Ruchit Patel mentioned, this price range is not the best for OOS investors.
A good 3 bd house in class b neighborhood in Memphis is not below 165k to 175k currently.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes4y
Quote from @Mustafa Nemat Ali:
Hi there - I'm a German citizen currently living and working remotely in Asia and would like to invest in US property. Not looking for any get-rich-quick schemes but rather modest rental yields and capital appreciation to achieve a decent ROI on the property. I would like to start off with a property under $100k which will be paid in full by me without any mortgages etc. Any suggestions on what locations/markets to look at? Any recommendations/suggestions for a turnkey company? Thanks in advance! Mustafa
Welcome aboard my man. Many markets available that will get you where you want to go. Cleveland is the one I work in and it's also very popular with long distance investors because it's uber cheap. So I figured you'd get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama. Those market would also fall in line with what you are looking for.
In addition there are tons of other turnkey markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors
- Cincinnati, Ohio
- Dayton, Ohio
- Toledo, Ohio
- Youngstown, Ohio
- Cincinnati, Ohio
- Memphis, Tennessee
- Saint Louis, Missouri
- Indianapolis, Indiana
- Detroit, Michigan
- Erie, Pennsylvania
- Louisville, Kentucky
- Milwaukee, Wisconsin
- Jackson, Mississippi
Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.
One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.
- Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
- Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
- Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
- Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
- Make sure your property manager is a licensed real estate brokerage.
- Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
- Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.
- Memphis, TN · Member since 2022 · 230 posts · 99 votes4y
Hello @Mustafa Nemat Ali
Memphis is a great market to invest in! It is becoming a little bit tougher to get turnkey properties for under $100,000 but sometimes we do still have some things that pop up!
I would be more than happy to discuss the Memphis market with you and answer any questions for you!
- Real Estate Agent · St. Louis, MO · Member since 2017 · 74 posts · 20 votes4y
I am a local investor and real estate professional here in St. Louis. for the last several years, we've helped many out of state and international investors begin building their portfolios here in St. Louis. Very robust rental market, great price to rent ratios, and landlord friendly legislation makes St. Louis a very desirable cashflow destination for many investors. Our team is able to help provide management services, construction, and more, making the investing process very seamless for someone who is not local. Furthermore, we have offices in almost all of the cities that @James Wise mentioned in his post, making it possible to grow together if you have interest in several markets. If you would like to learn more about St. Louis I would love to connect and serve as a local resource to help answer any of your questions and begin building a local team. I look froward to hearing back and staying in touch.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes4y
Quote from @Matt Guignon:
I am a local investor and real estate professional here in St. Louis. for the last several years, we've helped many out of state and international investors begin building their portfolios here in St. Louis. Very robust rental market, great price to rent ratios, and landlord friendly legislation makes St. Louis a very desirable cashflow destination for many investors. Our team is able to help provide management services, construction, and more, making the investing process very seamless for someone who is not local. Furthermore, we have offices in almost all of the cities that @James Wise mentioned in his post, making it possible to grow together if you have interest in several markets. If you would like to learn more about St. Louis I would love to connect and serve as a local resource to help answer any of your questions and begin building a local team. I look froward to hearing back and staying in touch.
- 4yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Mustafa Nemat Ali I think your goals are realistic although I think your price point is low. A year or 2 it was more feasible to get something decent for under $100K in some of the more affordable markets, but even those markets are now over $100K. Anything under $100K today is going to be in a rough area or need work. Don't be tempted by low prices. There's a reason the prices are low. I've seen far too many out of state or foregin invetors get dupped by this low end asset class. Don't make that mistake and make sure that you understand the neighborhoods that you're buying. Do your own du diigence and don't just relay on what someone else tells you. Any mistake you might make can be overcome except for buying in a bad area. You can't move a house.
- Real Estate Broker · Beloit, WI · Member since 2015 · 232 posts · 60 votes4y
Quote from @Mustafa Nemat Ali:
Hi there - I'm a German citizen currently living and working remotely in Asia and would like to invest in US property. Not looking for any get-rich-quick schemes but rather modest rental yields and capital appreciation to achieve a decent ROI on the property. I would like to start off with a property under $100k which will be paid in full by me without any mortgages etc. Any suggestions on what locations/markets to look at? Any recommendations/suggestions for a turnkey company? Thanks in advance! Mustafa
I would suggest south central Wisconsin. A steady flow of great deals, 15 to 20% cash on cash return on investment.
- Member since 2020 · 10 posts · 2 votes4y
I am an out of state investor and would recommend (MIP - Memphis Investment Properties) who is really turnkey. You would buy a property with them and in more than 75-80% of the cases, you would have a tenant in it before closing (Property management done by their sister company).
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes4y
Quote from @Mustafa Nemat Ali:
Hi there - I'm a German citizen currently living and working remotely in Asia and would like to invest in US property. Not looking for any get-rich-quick schemes but rather modest rental yields and capital appreciation to achieve a decent ROI on the property. I would like to start off with a property under $100k which will be paid in full by me without any mortgages etc. Any suggestions on what locations/markets to look at? Any recommendations/suggestions for a turnkey company? Thanks in advance! Mustafa
Hello , simple, just connect with someone that provides rentals with 10% ++ net caps to out of the country investors
Good Luck
- Member since 2019 · 7 posts · 2 votes4y
Quote from @Clinton Bolton:
Is it even possible to buy a property in cash as a foreigner under your own name without having to register an LLC due to taxes purposes because you won't have a SSN?
I would register an LLC anyway :)
- Member since 2019 · 9 posts · 1 vote4y
Hey @Scott Sklare
To be getting 15-20% ROI what price range are we looking at and also what kind of neighborhood to be getting that kind of return. Would love to get more insight.
Have a great day
- Memphis, TN · Member since 2022 · 230 posts · 99 votes4y
Hey @Ashil Katira
Thanks for thinking of us! I would be more than happy to help anyone here in the Memphis market!
- 4yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
We think the Midwest is a GREAT place for OOS investors to consider!
YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/...
Your biggest question shouldn't be WHERE to invest, but HOW you will invest!
Many OOS investors set themselves up for failure because they don't truly take the time to understand:
1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.
2) The Class of the PROPERTY they are buying - which is relative to the overall area.
3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.
4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.
5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.
6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.
7) That OOS property Class rankings are often different than the Class ranking of the local market they live.
8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.
9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.
10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.
11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?
Good luck with whatever you decide😊
Logical Property Management4.9450 Reviews - Real Estate Broker · Beloit, WI · Member since 2015 · 232 posts · 60 votes4y
Quote from @Clinton Bolton:
Hey @Scott Sklare
To be getting 15-20% ROI what price range are we looking at and also what kind of neighborhood to be getting that kind of return. Would love to get more insight.
Have a great day
- Real Estate Broker · Beloit, WI · Member since 2015 · 232 posts · 60 votes4y
Sorry for the delayed response. I suggest we have a phone chat.
Scott, 608-438-6371
- Member since 2019 · 9 posts · 1 vote4y
@Scott Sklare sure thing but im out of the country at the moment. you able to FaceTime?
- Real Estate Broker · Beloit, WI · Member since 2015 · 232 posts · 60 votes4y
Quote from @Clinton Bolton:
@Scott Sklare sure thing but im out of the country at the moment. you able to FaceTime?
Please switch to text messaging, my text is 608-438-6371
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