Turnkey Properties and Providers---Thoughts????

Question

I am in the process of buying my 1st rental.  I am not ready for BRRRR method as of yet and not ready to take on a home that needs a lot of work.  I was thinking of a turnkey or a home that just needs cosmetic updates.  Places like roofstock and MI 9 Morris investments come up quite a bit.  All the reviews I find are from 2019.

Makes me think I need to find a Realtor that knows the market I want to work in and go from there.   I know that no property comes with no risk and zero repairs. Just want one that I can go a few years without a major issue or the bet chance of that.

Any thoughts on companies like this?

Joseph Schweizer · Answer

Hi Eric!

I thought turnkey was a good option for me to get started in real estate as well. I purchased a turnkey investment in October 2020 and so far things are going well (see post below)! You definitely want to do your due diligence on any turnkey providers or anyone else you might work with. I would make sure you find reviews and talk to investors who have worked with the provider long term and also investors who have invested with the provider more recently. Also, if you take the next step and make a purchase, due diligence on the property and neighborhood will be even more important.

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

Best Wishes!

Eric Morel · Answer

@patrick

@Patrick Bavaro Due to my capital availability, I am going to go against turnkey providers. I am going to have to determine what level of rehab I am comfy or find lower priced properties that may just need slight updating.

Logan Murdock · Answer

I'm doing the same as Patrick and investing in new construction in Cape Coral with RTR. It's going to be a long process, but it's looking like great returns.

Logan Murdock · Answer

That makes sense. I was able to do the Cape Coral build for ~$33K cash down and will have the option to refinance after it’s built, but it will be a good year or so.

Another option is to work with a partner. There are strategies that require little of your own money and increase your velocity.

Danielle Jackson · Answer

Yes - finding a good realtor who works with other investors is the best way to learn the market. They may potentially be able to help you source some deals before they hit the market.

Patrick Bavaro · Answer

@Eric Morel I can’t speak for any of the other turnkey properties you mentioned, but like you, I decided to purchase my first investment property last year through a turnkey provider called Rent To Retirement. They are all over BP, I’m surprised you haven’t heard of them! Anyways, I’m currently building a new build in Cape Coral FL with them. Total all in costs is $265k, and only required 10% down. Rents are $2300/mo and post appraisal construction is between $340k-$410k depending on location. I don’t count this are hard fact truths, but I also received an email from Zillow for my zip code in Cape Coral this week that had It projected to grow by 27% over the next year! Bananas. Would be happy to connect and share my experience. Good luck!

Stephen Brown · Answer

You need to vet these companies with good questions about the area and their properties and how they provide their services. Overall I think it is a great way to grow if you want the least amount of headaches. I know some investors here that got started this way and still continue to grow by buying turnkey.  You just need the right team in the right market.

Patrick Bavaro · Answer

Sounds like a solid plan! Good luck on the rehab. Keep us posted with your progress!

Patrick Bavaro · Answer

@Eric Morel just realized you responded but the tag didnt work. What did you end up deciding over the last few weeks?

Eric Morel · Answer

Wish I knew a partner. I will be starting off small. Will buy 2 properties the traditional way just to get used to the process. Once I get those undery belt will use BRRRR. Maybe eventually I will use turnkey, buty price point to get started in lower then some want time invest at.

Turnkey Properties and Providers---Thoughts????

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