Hi Everyone,

In extension to the thread I made here Finding my first Deal, I am realizing that Turnkey may be the best way for me to start off. As of now --

• I want to keep my down/up-front payment in the $20-25k range
• I pretty much need to be out of state because I live in CA and it seems there is nothing profitable at the lower end. 
  • I hear Kansas City is a great option
• Looking to build a team
• I did read this article The Dirty Truth About Turn-Key Real Estate Investments so I acknowledge there is more profit to be made by manually following something like the BRRRR method, however my first go it could be too much. I do work full time after-all.

I got a few college requests in my last couple posts from (I believe) Real Estate firms, but It'd be great to chat with someone a bit about how the details of would work. In essence, I am hoping to form a team with a property manager, lender, etc. 

As an aside, does anyone recommend I actually start off with BRRRR from the get-go? I'm feel I understand the theory behind it and it sounds like an excellent way to make money while revamping homes and adding value to a neighborhood, however I really don't have a network to make the process fluid to any degree.

@Eric Sender, ask yourself this: how long can you defer building that team you ultimately want?

Does TK at first actually help you acquire those contacts, or just defer the hard decision until later?

I might suggest going with a good TK deal, but then IMMEDIATELY start making those calls and keeping a list of the people who will ultimately make it into your Dream Team. 

I can't think of any way other than to Just Do It!

@Eric Sender

We started off investing in turn keys.  We have bought a total of 6 of them, but are actually in the process of selling or have sold 4 of those.  

I feel like buying those properties was a great way to get started in real estate investing, and I equate it to 'training wheels' in a sense.  A reputable turnkey provider is going to be supporting you along the way and won't let you fall.  However, you aren't going to be able to ride super fast with training wheels on!  

We started realizing that by buying under market value, rehabbing ourselves (and by that, I mean hiring it out), and then PMing ourselves, that we were able to add value instantly. We jumped into our first local deal as a BRRR. It was successful, but I have to give credit to the fact that the market jumped up while we happened to be doing our rehab!

I personally wouldn't recommend jumping right into a BRRR on your first deal, because I think it is important to get a safe taste for real estate investing. A turnkey rental lets you understand the full process of reviewing a deal, going through the loan process, inspection process, and then seeing month to month how revenues and expenses play out. It is a really safe way to learn (assuming you pick the right provider). However, we would not buy anymore turn keys at this stage, as we prefer the added value of going about it on our own.

Jenny

I’ve bought turnkey and non turnkey. I think they both have their advantages. You can definitely build your own team without using turnkey but I think if you’re in the right situation it can be a good method.

For it to be the right situation think of some of the following things: 1. How fast can you buy after your first one? If you buy one and are done for a couple years that seems like a bad idea. If you can buy one every couple months and get to 5 in a couple years it may be a good strategy.

2. Turnkey is good for someone who has some money but not enough time to source their own deals. I’m a young professional who’s in the process of going back to school part time. I don’t have a lot of extra time to source my own deals or manage a rehab.

3. If you find a good provider you can simply your process a lot.

Feel feel to pm me if you want

Originally posted by @Eric Sender :

Hi Everyone,

In extension to the thread I made here Finding my first Deal, I am realizing that Turnkey may be the best way for me to start off. As of now --

• I want to keep my down/up-front payment in the $20-25k range
• I pretty much need to be out of state because I live in CA and it seems there is nothing profitable at the lower end. 
  • I hear Kansas City is a great option
• Looking to build a team
• I did read this article The Dirty Truth About Turn-Key Real Estate Investments so I acknowledge there is more profit to be made by manually following something like the BRRRR method, however my first go it could be too much. I do work full time after-all.

I got a few college requests in my last couple posts from (I believe) Real Estate firms, but It'd be great to chat with someone a bit about how the details of would work. In essence, I am hoping to form a team with a property manager, lender, etc. 

As an aside, does anyone recommend I actually start off with BRRRR from the get-go? I'm feel I understand the theory behind it and it sounds like an excellent way to make money while revamping homes and adding value to a neighborhood, however I really don't have a network to make the process fluid to any degree.

Investing in Turnkeys can be a great way to earn a better ROI than you can find in your own market. Yes, they are also perfect for people who work 9-5s or are not ready to become a full time project manager or landlord.

Do some research into the companies and the markets you are considering. I am sure you will find some good information on here.

Try looking at:

The Best Types of Markets for Profitable Turnkey Properties

and

What to Ask When Working With a Turnkey Provider

@Eric Sender I think one thing you possibly haven't considered in weighing turnkey vs BRRRR is that in BRRRR - assuming you are buying a distressed property to add value - you are going to have to come in with all cash for the purchase and for the rehab. Now you may be able to get a hard money loan, but that is going to add to your costs. In true turnkey you can purchase using conventional financing with just 20-25% down, and have cash flow from day one. You only buy after rehab is complete, inspections and appraisals are done. With BRRRR you are assuming tons more risk and when doing so at a distance you are relying very heavily on others who don't necessarily have your best interest in mind. You have to have some pretty tight systems in place, and be very on top of managing the team or the project manager. There are a ton of things that can go wrong even with a trusted team in place.

@Eric Sender Good luck to you! I love Kansas City. Turnkey is a great option if you want to be hands off in the process and don't have a lot of time!

@Eric Sender as @Jeffrey Nordin says just do it.

Yea turnkey is like paying retail and more but it’s a start. Just don’t buy in a bad area and without an exit strategy to sell off one day (sooner than you think)

@Lane Kawaoka, why earlier than you believe to exit TK...?

@Jeffrey Nordin  

We are in KC and have a few rentals. My husband is a licensed general contractor and manages our properties. We'd be happy to talk with you about working togethe if you are interested in partnering on something or would like a remodel team. However, we are leaving for Germany in the morning so depending on wifi consistency, may not respond to posts until after New Years. 

If you are thinking about turnkey, I would definitely check in with @Nathan Brooks here in KC. He has been on the show twice and my husband met with him for a mentoring session a couple years ago. He seems to be forthright and ethical. I know he knows the market and has a team which does quality rehabs. I've seen his properties online. He has really grown his business in the past year or two. Good luck to you! 

@Nathan Brooks

There is good ppl in KC that can assist in a turnkey property NOT using a provider, Also there are many providers in KC with mixed reviews from good and bad,  @Eric Sender what providers have you talked too?

I'll send you a message.

@Eric Sender We'd love to help in anyway we can here in KC. Its a great market. And thank you @Carrie Hallensleben I hope you and your husband are doing well!!