New to Real Estate · NYC · Member since 2020 · 1 post · 4 votes
Hi everyone! I’m a new investor looking to get started on my first property. I live in a very expensive market (NYC) so I’m evaluating long distance markets as a place to get my feet wet on a smaller deal. I’ve been reading like crazy to learn as much as I can, but it’s still intimidating to find a deal, place an offer, manage rehab, find property management, etc with no experience.
Because of my inexperience, I’m also evaluating turnkey properties as an easier way to get started. Although the return would be lower, at least I could get started relatively easily without finding management and tenants, managing rehab etc, and hopefully I can gain confidence and learn along the way.
Does anyone have thoughts on a long distance rental vs a long distance turnkey as as a first investment?
For further context, I plan to purchase in early 2020, and by then I will have 50k saved as well as a 12k emergency fund.
Rental Property Investor · Petaluma, CA · Member since 2015 · 151 posts · 143 votes
6y
I faced this question myself and opted to not go turnkey. I was able to purchase a home from 2000 miles away in Indy via a realtor, perform a property turn and get it leased for 16 months in the dead of winter. It was taxing on my emotions and a ton of lessons were learned along the way. I spent a ton of time researching and connecting before finding someone I trusted and pulling the trigger. @David Greene wrote a book on Long Distance Investing which I highly recommend.
What are your goals for the next year? 3 years? Long term? Turnkey is a great way to jump in immediately but it too requires research and proper due diligence. If you are looking to truly get involved in REI and build a team in a market turnkey may or may not be the answer.
Mindset is a huge factor in this game. Know things will go wrong and it is how you adapt that will be the key to your long term success. Turnkey is easy but growth doesn't happen inside our comfort zones.
@Beth Barnes I am in the same situation and posted a similar post looking for someone with experience with this that could help with a specific company, but I did not get any responses. If you do not get any feedback I would happily share the contact information for the companies I have been speaking with and trying to decide between.
Hi everyone! I’m a new investor looking to get started on my first property. I live in a very expensive market (NYC) so I’m evaluating long distance markets as a place to get my feet wet on a smaller deal. I’ve been reading like crazy to learn as much as I can, but it’s still intimidating to find a deal, place an offer, manage rehab, find property management, etc with no experience.
Because of my inexperience, I’m also evaluating turnkey properties as an easier way to get started. Although the return would be lower, at least I could get started relatively easily without finding management and tenants, managing rehab etc, and hopefully I can gain confidence and learn along the way.
Does anyone have thoughts on a long distance rental vs a long distance turnkey as as a first investment?
For further context, I plan to purchase in early 2020, and by then I will have 50k saved as well as a 12k emergency fund.
Many investors investing OOS tend to go with Turnkeys. If you go with a true provider, they should have done everything in-house prior to purchase. They would renovate the property in-house, place a tenant prior to closing and handle the management after closing. They should do this all locally too!
Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
6y
@Beth Barnes
Investing OOS long distance is more difficult at first, forces you to find your “Core 4” one by one and you are force to learn quick sink or swim turn key I would imagine is easier but you’re paying a premium price for that luxury.. I guess it all depends on the market, the market im in don’t really know of any turn key providers compare to other markets. Some start w a turn key providers and once they have their feet wet and with some experience then they do it themselves it doesn’t really matter how you start Whats important is to start somewhere..
Investor · Las Vegas, NV · Member since 2019 · 499 posts · 259 votes
6y
@Beth Barnes There really aren't a whole lot of differences between long distance rental and long distance turnkey. Turnkey is no different from any other rental other than the fact that it has been fully renovated with a tenant has been in place. Turnkeys are set up so that once you buy, you immediately get cash flow. Think of it as a lazy way to invest. But it's great for beginners who want to get their feet wet or investors who are too busy to put in the time to do the work themselves. Hope this helps! I invest in turnkeys myself so feel to reach out to me with any questions.
Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
6y
I am a partner and co-founder of a successful Turnkey operation in Indianapolis, so you'd think that my answer would be biased, but it's not...
The answer to your question:
IT DEPENDS.
The right turnkey (there are good and bad ones) provide a lot of value in terms of acquisition, rehab quality, tenant quality, management quality, etc. The reason they are successful is because they are set up to do all the heavy lifting...offering WAY more value to the investor than what they can do on their own...especially from a distance.
If you have the time, money, freedom to fly back and forth, and inclination to do all of this yourself, then Turnkey is NOT for you. If you are a busy professional, and feel your time and efforts are better spent doing what you do best, then Turnkey IS for you.
Rental Property Investor · Petaluma, CA · Member since 2015 · 151 posts · 143 votes
6y
I faced this question myself and opted to not go turnkey. I was able to purchase a home from 2000 miles away in Indy via a realtor, perform a property turn and get it leased for 16 months in the dead of winter. It was taxing on my emotions and a ton of lessons were learned along the way. I spent a ton of time researching and connecting before finding someone I trusted and pulling the trigger. @David Greene wrote a book on Long Distance Investing which I highly recommend.
What are your goals for the next year? 3 years? Long term? Turnkey is a great way to jump in immediately but it too requires research and proper due diligence. If you are looking to truly get involved in REI and build a team in a market turnkey may or may not be the answer.
Mindset is a huge factor in this game. Know things will go wrong and it is how you adapt that will be the key to your long term success. Turnkey is easy but growth doesn't happen inside our comfort zones.
Hi everyone! I’m a new investor looking to get started on my first property. I live in a very expensive market (NYC) so I’m evaluating long distance markets as a place to get my feet wet on a smaller deal. I’ve been reading like crazy to learn as much as I can, but it’s still intimidating to find a deal, place an offer, manage rehab, find property management, etc with no experience.
Because of my inexperience, I’m also evaluating turnkey properties as an easier way to get started. Although the return would be lower, at least I could get started relatively easily without finding management and tenants, managing rehab etc, and hopefully I can gain confidence and learn along the way.
Does anyone have thoughts on a long distance rental vs a long distance turnkey as as a first investment?
For further context, I plan to purchase in early 2020, and by then I will have 50k saved as well as a 12k emergency fund.
I started the turnkey route and would necessarily recommend it (just my $.02). I would highly recommend buying something that is in good shape and learning what you don't know that way.
Feel free to reach out - would be more than willing to help you out.
Hi everyone! I’m a new investor looking to get started on my first property. I live in a very expensive market (NYC) so I’m evaluating long distance markets as a place to get my feet wet on a smaller deal. I’ve been reading like crazy to learn as much as I can, but it’s still intimidating to find a deal, place an offer, manage rehab, find property management, etc with no experience.
Because of my inexperience, I’m also evaluating turnkey properties as an easier way to get started. Although the return would be lower, at least I could get started relatively easily without finding management and tenants, managing rehab etc, and hopefully I can gain confidence and learn along the way.
Does anyone have thoughts on a long distance rental vs a long distance turnkey as as a first investment?
For further context, I plan to purchase in early 2020, and by then I will have 50k saved as well as a 12k emergency fund.
New to Real Estate · Seoul, South Korea · Member since 2020 · 6 posts · 3 votes
6y
I had not previously considered turnkey and this thread has really peaked my interest. David Greene's book on long-distance investing is next on my reading list. I'm currently teaching English in South Korea, but the recent coronavirus outbreak has resulted in the school where I work being closed for the next few weeks, so I have lots of extra time on my hands to do some homework! I would love to connect with others who have experience investing while living abroad or are trying to figure out the best way to go about doing so as I am!
I had not previously considered turnkey and this thread has really peaked my interest. David Greene's book on long-distance investing is next on my reading list. I'm currently teaching English in South Korea, but the recent coronavirus outbreak has resulted in the school where I work being closed for the next few weeks, so I have lots of extra time on my hands to do some homework! I would love to connect with others who have experience investing while living abroad or are trying to figure out the best way to go about doing so as I am!
Not sure on the whole abroad thing but I would definitely do your research on house hacking and consider it when you do make it back state side.
New to Real Estate · Seoul, South Korea · Member since 2020 · 6 posts · 3 votes
6y
@Noel R. That is definitely something I'm open to, unfortunately, I have no idea when I will be moving back to the states, so rather than wait for that I'm looking for ways I can get invested within the next year or so ideally.
Real Estate Agent · Post Falls, ID · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Beth Barnes - I would start doing some research on cities you want to invest in. Once you pick one, fly to that city for four to five days and meet with your "core four." Agents, Lenders, Contractors, and Property Managers. Ask them all of the necessary questions (can be found on BP and in the Long Distance Real Estate Investing book by David Greene).
Once you've built a trusted team, you can then lean on them to find you deals and get them done. This is much easier said than done, but if you can do this once and replicate the process, it will work wonders for you. Because then you can replicate in another market.
A strategy that I took is that I went to a bunch of different real estate conferences. I met a team of agents who already have these team members in place. I latched on to what they built and am benefitting in that regard.
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
6y
@Beth Barnes I would look to Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets.
Wylie, TX · Member since 2018 · 75 posts · 55 votes
6y
@Beth Barnes I highly suggest spending the time to pick 2 markets, focus on 1 until factors dictate otherwise, find the best pm you can. they are already plugged in to all the other supporting team members.
If that pm happens to be associated to a turnkey operator, all the better.
for OOS investing, the best deal can go south with bad pm.
having said that, I can recommend wilmoth group for PM. and while I have yet to close a deal with hrre I plan to because I met with shecky and team. they run a tight ship.
Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes
6y
What was last week will not be the same going forward. We will all have to look at a reset sometime this year on all markets over the economic downturn. All bets of what was hot and what was not should be off the table and reviewed to see how the virus impacts each market. My Realtor friends say the market is dead right now, in NEFL. Its as if the virus turned off the demand.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
@Beth Barnes don't assume that you'll pay more for a turn key. Unless you are local, have experience, systems in place and the right people on the gorund, it's unlikely that you can manage this from out of state and save money. It sounds good on paper but doesn't always work out. Turn key companies have a lot of cost advantages and economies of scale that an individual doesn't. They buy further upstream at better prices. You don't find deals on the MLS. They get substantial discounts on materials and HVAC 's roofs etc. Since they usually keep crews fully employed, the have better control over their labor costs. Trying to manage a project from out of state is risky. You have to ask yourself if you have the time and experience to do it and is the risk worth it when there is no guarantee you will save money. If you're going to do this on a large scale and make a business out of it then it makes sense to build a system. If you're going to do it for a few properties, it probably isn't worth it.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
6y
This article isn't speaking to exactly what you're asking...it's focused on turnkeys being good for new investors...but some of the points in it may still be applicable if you're considered which way to go-
The returns may be lower, but they may not. Especially if you're newer... it doesn't take much to completely botch a project and end up costing yourself way more than a turnkey would have. I'm in LA so same pricing issue out here as in NY... I go the turnkey route almost all of the time. I don't have time or interest in doing any of it myself, and if I were to save some small amount of money doing it myself, it wouldn't be worth it for the loss of sanity I'd get. Personal preference though!
A turkey company sells a renovated property with a tenant in it and PM already in place. A rental property can also be bought on the market with a tenant(s) in place, you'd just use a realtor and pick your PM rather than going through the TK company. I'm not sure the result is really very different, as others have pointed out. The thing I would urge you to think about it what will that property be. I always tell new investors get at least a duplex because a SFH just doesn't generate enough income. So think about if you want to do a SFH or a small MF for that first one. Pick a market that actually has small MF if you want to go that route. Then find one on the MLS or find one through a TK provider.
I work in the Birmingham, AL market currently. Have you ever heard of Roofstock? They are somewhat similar to Turnkey, however you have the ability to hire your own PM. It gives a little bit more freedom, but also allows you to be guided through the process. Let me know if you'd like more information about it!
I started with turnkey remote in 2012. Its really the only way to get it done and then learn with training wheels. Most people would disagree but I was a higher paid engineer with little time. But if you don't have much money then you have to do a bit of sweat equity.
Rental Property Investor · Kansas City, MO · Member since 2019 · 24 posts · 12 votes
6y
@Beth Barnes I was in your position about 9 months ago. I live in CA and due to pricing and the regulatory/landlord rights climate did not want to get involved here.
I went to Kansas City MO with the plan to buy our first home through a highly recommended turn key company. We wanted to get our feet wet in the RE market out there and were willing to pay for the turnkey experience. More importantly from listening to all the BP podcasts, I wanted to get the first property "under my belt" to start building that momentum. It was a positive experience that came with great learn opportunities.
We ended up buying our second and third property through a realtor we found out there 2 months later and are currently watching the market closely for our 4th and 5th.
It was a good way for us to learn and understand the market. It is also another resource for us to fall back on if we want a ready to rent home.
Just because you do a turn key the 1st time doesn't mean you have to always do that. We look at turn keys, rehabs, agent listed homes, BRRRR properties, and more just knowing we have "more tools in the tool box".
I think the biggest thing is just getting that first property bought and running, it gets easier with each one..... And the addiction grows lol.
Hi everyone! I’m a new investor looking to get started on my first property. I live in a very expensive market (NYC) so I’m evaluating long distance markets as a place to get my feet wet on a smaller deal. I’ve been reading like crazy to learn as much as I can, but it’s still intimidating to find a deal, place an offer, manage rehab, find property management, etc with no experience.
Because of my inexperience, I’m also evaluating turnkey properties as an easier way to get started. Although the return would be lower, at least I could get started relatively easily without finding management and tenants, managing rehab etc, and hopefully I can gain confidence and learn along the way.
Does anyone have thoughts on a long distance rental vs a long distance turnkey as as a first investment?
For further context, I plan to purchase in early 2020, and by then I will have 50k saved as well as a 12k emergency fund.
I wanted to hop in here again and say that turnkey company may be fine but would recommend finding a really good agent in the market you are looking at. They will know everything about the market. They will know contractors, bankers, financiers, etc...Happy to chat more about how this works if you would like.