Recommended Locations/Regions for Turnkey Investing

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Recommended Locations/Regions for Turnkey Investing

Joshua Zapin
Boulder, CO · Member since 2016 · 22 posts · 4 votes

I have more money than I have time and live in a market (Boulder, CO) that doesn't lend itself well now for investing.

Turnkey real estate investing seems like the right entrance into REI for me.

Question: What are some recommended locations? Some of the ones that I have intrigued me based on the reputations of turnkey investment companies that focus on them include:

  • Memphis (Memphis Invest)
  • Houston (Memphis Invest)
  • Indianapolis (Morris Invest)
  • St. Louis (St. Louis Property Direct)

Any other thoughts/recommendations?

Any thoughts would be greatly appreciated.

Thanks.

JZ

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Aron D.
Rental Property Investor · San Diego, CA · Member since 2008 · 89 posts · 65 votes
9y

I used a turnkey provider and was offered a 9% return on my note purchase.  I am in CA and the property was in PA.  I got steady payments for 18 months and then it started to go downhill.  I had to constantly follow up about interest payments and eventually found out the turnkey provider was going under.  The property was given back to me via deed in lieu of foreclosure.  I obtained a property that was in bad shape.  It had back taxes, utilities, interior beat up, and the roof was shot.  During this time of transition, PA was in a winter storm and the pipes burst in the house.  The property manager and contractor repaired the damage.  After 4-6 months the property finally was in a condition to put on the market to try and get my money back, but it took all the interest payments plus extra funds to get it to this point.  We priced the property equivalent to the amount a down payment would require on a house in CA.  I didn't realize the challenges in investing in such depressed areas.  As Charles Roberts stated, it is not worth it for me to trust a 3rd party that I am not familiar with.  I was referred to this company by my 401k provider and assumed they did their due diligence. 

Everything could go smoothly for 1 to 2 years and then once things go downhill, then it can get bad quickly.  I have the best luck and income from investing in properties that I can drive by everyday and vet the tenants myself.  If you feel like flying out and visiting the property yourself and seeing the condition it is in before you buy and during the rental period, then go for it.  I just can't justify the hassle for $200-$300 profit per month.  The back taxes I had to pay to make the property current was $4k, new roof $7k, rehab interior $10k.  It was the largest headache for the least amount I've ever invested in real estate.  Hopefully I can recoup some of the money invested and not take too much of a loss.  Also hope the property management company is honest about repairs and the mechanicals of the home can stay together by the time I get an offer.  It is currently rented and the renter stated bed bugs were in the house.  It has been vacant for 6-8 months.  I got a quote from them that the exterminator wanted $1400 to rid the house and I had them get additional quotes.  It cost $750 to get rid of the problem.  Good luck on whatever you decide to do.   

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  • Brian Foster
    Investor · Cypress, TX · Member since 2016 · 170 posts · 139 votes
    9y

    Houston far from "tapped out" IMHO. Still great opportunity here. Great mix of cash flow and appreciation that you would be very challenged to find in any other market. Some things Houston offers that are so hard to find in any other markets:

    Critical mass (4 th largest city and still growing fast)

    Low cost of entry and housing cost 30% below other large cities  (buy a $150K house that rents for $1,500/mnth)

    Diverse and resilient economy and population*

    * passed NYC for most diverse city int he nation last year, Lost >80,000 oil and gas jobs in last 2 years and still put on more jobs than we lost (highest employment rate in city's history today)   

    Still great TK opportunity here, I work with them everyday ;-)

    Houston (and TX) are creating jobs as fast or faster than any other area, this is drawing people to the area, they need housing, there is a shortage of available, affordable,  quality housing. It works very well for investors   

    1Reply
  • Simon Ruiz
    Glendora, CA · Member since 2016 · 106 posts · 21 votes
    9y
    Brian Foster hey Brian do you have a link to the turnkey company you work with in Texas??
    0Reply
  • Brian Foster
    Investor · Cypress, TX · Member since 2016 · 170 posts · 139 votes
    9y

    @Simon Ruiz

    http://texasturnkeyproperties.com/

    http://www.htownrpm.com/

    0Reply
  • Joshua Zapin
    OP
    Boulder, CO · Member since 2016 · 22 posts · 4 votes
    9y
    Originally posted by @Andrew Kougl:

    @Joshua Zapin

    I had this same question and another investor pointed me to a very helpful site: http://www.cashflowdiaries.com/31-questions-to-ask...

     Thanks.  Great post. 

    JZ

    0Reply
  • Vivek Khoche
    Investor · San Jose, CA · Member since 2017 · 343 posts · 102 votes
    9y

    @Joshua Zapin - Welcome to the club of RE investors in the similar situation like you. Search BP bit hard and you will find answers to your questions. Pretending to have no time is sure disaster no matter whether you invest in RE/stock market or play black jack in Vegas. There is a  short story on BP about meeting between two people one with experience and other with money, at the end of meeting each one walked away with other person strength.

    Good Luck Investing

    Vivek

    0Reply
  • Nathan BrooksBusiness Member
    Lender · Kansas City, MO · Member since 2012 · 403 posts · 188 votes
    9y

    Welcome @Nam Nguyen - let us know if we can be of help! Have an awesome week!

    Podcast Guest on Show #78
    Ridgeline Capital Group527 Reviews
    View Page
    0Reply
  • Joe FunariBusiness Member
    Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
    9y

    @Joshua Zapin Recommend you look to work with Real Estate agents in the areas your interested in out of state too. I have been very successful in finding both MLS and off-market "turnkey" deals for fellow investors. @Chris Lopez post was dead on. If you plan on a buy-and-hold strategy be sure your looking long term. The cap rates aren't great at the beginning. But you will be sure to have positive cash flow. This will help you build your REI company quickly. If you want to learn more about the Dallas/Ft. Worth market I will be happy to give you practical examples and you can perform your due diligence. Just send a PM.

    1Reply
  • Jeff Schechter
    Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
    9y

    @Joshua Zapin We operate a very successful TK company in Indy.  I'm happy to visit with you about the merits of Indy.  Of course, processes are everything.  PM me if you want to know more.

    0Reply
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