Any one owns a turn-key real estate (kris krohn)?
hi, Recently, I found about a turn-key company owned by Kris Krohn and I talked to them on phone. Anyways, I want to know if this a good deal or not. Worse case, I lose thousands of dollars
Their main selling part was that they can take my $60k investment and turn it into 20 houses in next 15 years which will generate $400 cash-flow per house. These houses are single family houses and location is Tennessee, Floridia and Texas. Also they don't keep houses for long terms, which means they sell and re-buy houses every 5 years to lower the high cost of maintenance, such as the roof.
Draw back of this turn-key company is that all of the houses will be 50/50 partnership. So on each house, they will receive $400 cash-flow and I will receive $400 cash-flow. House ownership also will be 50/50.
Total investment they are asking is for $60k
- $10k will go into up front fee
- $25k will go into down payment for house# 1
- $25k will go into down payment for house # 2
both houses will have the following:
- Houses purchase price is around $140k
- 25% equity position
- 23% ROI (might be gross roi)
- 7% to 10% cash-on-cash ROI
- $400 per month cash-flow (after all expenses such as mortgage, insurance, property management etc...)
- closing cost will be in mortgage
Their 15 year plan will follow: (rough idea)
Year#1
- Pay $10k up front fee
- buy 2 houses with $50k down payment
- cash flow $800
Year#3
- buy 2 more houses with refinancing
- cash flow $1,600
Year#5
- Sell 4 houses and buy 5 more houses
- Cash flow $2,000
Year#7
- 7 houses
- cash flow $2,800
Year#9
- 11 houses
- Cash flow $4,400
Year#10
- sell 11 old houses and buy 12 new houses
- cash-flow $4,800
Year#12
- 15 houses
- cash flow $6,000
Year#14
- 18 houses
- cash flow $7,200
Year#15
- sell all houses and buy 20 houses
- cash flow $8,000