Top Turnkey Markets 2021 ( ~ 100K)
Seattle, WA · Member since 2019 · 3 posts · 2 votes
Hi All
I am a new investor (looking for my first investment home) and have been lurking around the threads here for a while.
I am looking into Turnkey homes and would love your inputs into the markets and preferably some turnkey providers.
I am looking to build a portfolio of atleast 3-5 homes in the next couple of years and can do homes around 80-100k if 25% down is needed.
I currently live and own a primary home in Seattle and given how even a 2bd costs a million dollars here, I am looking for out of state investment homes. Happy to answer more questions and get your recommendations.
Welcome to BP and the forums - and taking to the next level with engaging the community! There are many markets out there that still have inventory for cash flowing properties. What you will find is that lots of investors want to focus on "hot markets" - which is great, except when you see home prices increasing exponentially and rents not quite keeping pace - you start running into properties that aren't quite cash flowing.
There are still many great markets that you can invest in - even with keeping your budget around $80-100k. On single family, you may only need 20% down, although with lending these days and recent changes to Fannie and Freddie it DOES sometimes make more sense to bring more to the table for a lower interest rate (25%).
As you can imagine, I work with many investors in the Seattle market as well as folks all over the world for that matter that are looking for other markets to invest in. Here are some of the markets I would have you look further into - keeping in mind I am assuming you are looking for cash flow and want to keep those investment levels at 80-100k. (1) Alabama - specifically the Birmingham area - this area has seen some recent growth - home prices are rising and demand is rising - but there are still some great cash flowing investments to be found (especially in the outlying areas of Birmingham - like Adamsville) (2) Tulsa, OK - another market with a good job market, good population growth, and affordable housing. (3) Quad Cities - this is where Iowa and Illinois meet (separated by the Mississippi River) - you will can find affordable properties in this market as well that are cash flowing - Rock City, IL, Davenport, IA Bettendorf,IA and Moline, IL.
Bottom line is - there are still some great markets to research and find some great investment opportunities!
Unfortunately, for 2021 (at least right now), the "top turnkey markets" are just about any market that has inventory. Inventory is at an all-time low across the board, so a lot of turnkey providers have run out or are running out. New construction is really taking over turnkey world right now because it's the only way to get properties, but those are more expensive than $80-100k. There are turnkey providers with some inventory, but it's not nearly the level of pickings that you would have in a normal year. Which totally sucks. I run a turnkey rental properties Facebook group you're welcome to search on there... lots of talks of different providers, etc.
Welcome to BP! Similar to your market, I am in Northern VA and its very pricey and competitive which is why I explored out of state. My budge was under 100k as well and I found Memphis and Cleveland as my markets where I ended up investing. I have shared my experience below. Let me know if you want to connect and chat about it.
https://www.biggerpockets.com/forums/850/topics/890954-out-of-state-turnkey-investment-with-martel-turnkey
https://www.biggerpockets.com/forums/850/topics/902026-1st-sfh-purchase-with-roofstock-investors-delight
@Aj Parikh
How did you do with Martel? I just looked at their website. Their numbers seem very similar to other turnkey companies I have looked into. 120-140k for 1-1.1k rents. You gotta assume 5% vacancy for the math to work usually and light maintenance.
Welcome to BP and the forums - and taking to the next level with engaging the community! There are many markets out there that still have inventory for cash flowing properties. What you will find is that lots of investors want to focus on "hot markets" - which is great, except when you see home prices increasing exponentially and rents not quite keeping pace - you start running into properties that aren't quite cash flowing.
There are still many great markets that you can invest in - even with keeping your budget around $80-100k. On single family, you may only need 20% down, although with lending these days and recent changes to Fannie and Freddie it DOES sometimes make more sense to bring more to the table for a lower interest rate (25%).
As you can imagine, I work with many investors in the Seattle market as well as folks all over the world for that matter that are looking for other markets to invest in. Here are some of the markets I would have you look further into - keeping in mind I am assuming you are looking for cash flow and want to keep those investment levels at 80-100k. (1) Alabama - specifically the Birmingham area - this area has seen some recent growth - home prices are rising and demand is rising - but there are still some great cash flowing investments to be found (especially in the outlying areas of Birmingham - like Adamsville) (2) Tulsa, OK - another market with a good job market, good population growth, and affordable housing. (3) Quad Cities - this is where Iowa and Illinois meet (separated by the Mississippi River) - you will can find affordable properties in this market as well that are cash flowing - Rock City, IL, Davenport, IA Bettendorf,IA and Moline, IL.
Bottom line is - there are still some great markets to research and find some great investment opportunities!
I agree with @Account Closed, the Quad Cities is an awesome cash flowing market if you're looking in that 70-120k range for properties. I currently own 11 units across 8 properties here In Davenport, IA, all were acquired within the past 11 months across 5 different deals. Even in today's crazy market you are still able to find great cash flowing properties. Let's connect if you ever think about looking in our area.
@Marquez Davis are there any areas within Davenport that you would recommend? I’m looking at SFRs and duplexes there because there seems like there’s potential for good cash flow. I’ve heard some say to stay North of Locust but not sure if that’s true or not as many homes seem good South if it too and the neighborhoods similar.
@Andy Collins staying north of Locust is a pretty safe rule of thumb. The area just south of Highway 80 and west of Division St has a lot of upside potential with new Amazon distribution center going in there in the area, It's set to open in 2022 and they will be hiring 1000 new employees. Davenport is an excellent SFR and MF market. It isn't oversaturated with investors and good deals are still available there.
@Andy Collins I can mostly agree with @Mike D'Arrigo, staying above locust st and away from the west-end of town is usually ideal. Although, there are certain pockets below locust st that are ideal locations for renters due to having Palmer College in the center of town, (the 1st Chiropractic school ever created in the United States) along with another 4 year university less than a half mile away. That part of town is littered with small multi-family properties and older historic homes that have been converted into multi families. I would avoid the downtown Westend, going out west toward Interstate 280. That end of town has really been neglected with a lot of businesses moving/closing.
@Andy Collins, @Marquez Davis raised a lot of good points about some of the area's south of Locust. You need to be careful though with SFR's that have been converted to MF. Most of the time the gas and electric aren't metered separately so the landlord foots the bill. I'm not a fan MF that was not built as MF.
You can't go wrong with KC and OH, to be honest, just speaking from my personal experience and the price point you are talking about fits these markets. If you have questions about these markets feel free to PM me. I hope that helps and best of luck!