Buying rental on Zillow or turnkey provider??

Question

I am currently looking to get my first deal started. I live in California and am looking to do OOS investing. My plan is to buy a turnkey property. Does anyone this it is wise to buy a property off Zillow or is a turnkey provider a better option.

James Wise · Answer

Pretty much man. A house is a house.

Alyssa Dyer · Answer

@Adrian Beltran There are A LOT of pain points with on market.

1) you work with a normal realtor who often (not always, but often) doesn't know much about investing

2) you're flooded with hundreds of properties, most of which are not a good deal

3) the properties that are a good deal you've got to get to quickly, because many many other investors are looking too so you've got to pull the trigger ASAP to beat those investors

4) ASAP meaning you can't properly vet the property. So when you get to inspections (or your realtor whom doesn't know much about investments, or your inspector who is filling your report with things that are irrelevant to you making money and being able to keep a happy tenant) often much more needs to be done than was disclosed and often these "deals" are being sold as is.

5) you realize that you can make the numbers work, but it's not a great deal.. and this is when so many investors will swoop in and say "it's fine, you don't need a home run!"

My thought is, if there's a team that's been vetted by other investors that can tell you exactly what you're getting before you're getting it, that property meets your goals, and they're not charging you crazy fees that make the property not meet your goals anymore.. then why would you waste the time with anything else?

Some people have time and it's fine that they want to use it with the on-market strategy, but if off-market or turnkey meets your financial goals, why invest the time too?

Adrian Beltran · Answer

So as long as I have a good property management team lined up and the numbers make sense it shouldn't really matter which way I go?

James Wise · Answer

Well you need to do market research. Make sure you are familiar with the areas you are investing in. After that you need to make sure you've got a property management plan in place. So you could go with a traditional turnkey company or a hybrid turnkey company which involves an agent selling you properties from the MLS / Zillow / Their listings along with a property management arm in house to take things over post closing.

What you don't want to do is hire yourself a traditional residential Realtor who is used to driving buyers around looking at homes for their family to live in. The rental space is a totally different ballgame than what that kind of Realtor is used too.

Tom Ott · Answer

I don't understand what buying off of Zillow means? Do they sell properties now?

If you are investing OOS, I would not recommend just buying a property on its own unless you have a whole crew set up and ready to go. If it does not need ANY work, then I would have a PM ready to go. I would never try to flip or renovate from OOS or manage alone.

If you go with a Turnkey Provider, just make sure they are a TRUE Provider.

They should own the property first, renovate it, and manage it after the sale. Everything should be done in house!

Try looking at:

What to Ask When Working With a Turnkey Provider

Scott Passman · Answer

@Adrian Beltran Depends on your comfort level investing OOS, connections in that market, and time you have available.  If you have some reliable contacts in that market and are okay overseeing some rehab from afar, buying off the MLS, Zillow etc. is fine once you find a property that meets your criteria.  However, if you don't have much experience renovating/managing teams it may be beneficial to vet out reputable turnkey companies to purchase a property that is already rehabbed and rent ready.   Neither is a better option, just depends which one works better for you and your circumstances/goals.

Shaun J. · Answer

I think it doesn't make much difference as long as you have positive cash flow unless you are looking for future appreciations.