Real Estate Investor · New York City, NY · Member since 2016 · 7 posts · 8 votes
I wanted to open up a forum discussion on which Turnkey company would be best for beginning investors. Clearly, all 3 companies seem to be reputable in the industry, and offer quite good returns on investment. I wanted to ask seasoned investors on their thoughts on which would be the best option for the criteria I am looking for:
- Minimal down payment (<$20K if possible, 20-25% down payment options)
- Minimal involvement in property management, and frequent updates on financials
- Areas with good appreciation potential
- Minimal tenant turnover / vacancy
- Good Cashflow (>$300/month) and ROI (12-15%+)
Let me know what your thoughts are, and perhaps some additional criteria that I should consider.
Forgive me if my memory is wrong, but when I spoke with Memphis Invest about a year ago I think they told me that I should be prepared for their properties to appraise for less than the purchase price.
This is insane to me ... if the property appraises for less than the purchase price, that means that you are buying a property above fair market value and have NEGATIVE equity day one. What do your exit strategies then look like? How many years of $200-$300/mo positive cash flow (if that in reality) will it take you to claw back this negative equity just to get back to break even? And as discussed, there is no appreciation in these markets, that's why the cash flow appears to be so good. And what if it does not work out as rental as anticipated and advertised, what then? Well, then, you'll likely need to put more money in to make it ready for sale, in addition to the difference between what the house appraised for and what you purchased it for (assuming you could even sell it for appraised value), you'll need to add an extra 10% transaction fees to sell to your losses ... your down payment would be mostly if not all lost and you may even need to bring more cash to the closing table just to get out from under it. Doesn't sound like a very sound investment to me.