@Billy Maloney mind sharing the numbers on the property you purchased from Memphis invest?
@John Cushing sure. I paid 153k it appraised at 155k. Put 20% down about 35k. Rents for 1520. My mortgage payment including taxes and insurance 937month. Property management 152month.
Net is 431. When I ran numbers with 7 % vacancy and 10% for repairs/cap ex. (I would go higher on the repair/cap ex if it weren’t turnkey.) It turned out to be about a 7% cash on cash. The first 2.5 years have had no vacancy and only one small repair for 250. So my actual return has been about 16% cash on cash. Of course that will get averaged down when I have tenant turn over and more repairs. It has also appreciated a bit.
@Billy Maloney, excellent post, thanks for taking the time to write it. I agree with the overall theme, as well: Just Do It!
More education can MINIMIZE risk, but not ELIMINATE it. It's not really a question of How can I avoid problems, but rather, Which problems would I rather avoid? There is ALWAYS a trade-off.
As I get ready to embark on my first purchase, I found myself losing the guiding philosophy when debating all the counter arguments. I just tuned out for a minute to gather clarity.
Is TK perfect? Nope. Could I earn more by creating my own team across country? Maybe.
People, it's your life, you only get one, be bold.
JUST DO IT!
I think turnkeys are a great way to start. Living in Seattle at the time with no cashflow it was the only option since I was remote. Problem with turnkeys is that it is a stepping stone. You are paying retail plus, paying remote investor premiums for repairs, and a single point of failure.
Don’t buy them like gangbusters. 1-3 of them and you should be starting to go big or do it on your own.