Possible to find $30k turnkeys?

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Possible to find $30k turnkeys?

Eric Foss
Westchester, NY · Member since 2015 · 5 posts · 0 votes

Are you able to get a turnkey for $30k in a Class C neighborhood that generates at least $200/month cash flow?  This would not be a downpayment, I mean all in for $30k (could come up with closing costs separately).

I've been wanting to get into rental property investing for a long time but never had the money (I might still not have enough, I'm 47).  I have $30k which is from an equity loan on my home.  I made the mistake of buying my home in 2005 and took a beating on it, but that's a story for another day.  The area where I live is very expensive so I think I would have to go for an OOS turnkey.  I have a strong background in contracting/construction although I don't do it for a living anymore. Ideally I'd buy distressed properties, rehab, rent and manage myself, but the prices here are way out of my range making it impossible and frustrating.

Thanks for any input/opinions, Eric

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y

Turn key usually denotes fully renovated property ready to be put into service. pretty tough to buy the home renovate and crate a profit for those doing it all for 30k.. something has to give.

either the home was bought for nothing and there fore is in the worse of the worse neighborhoods.. or there is no major reno going on and cap ex will kill you..

use the money as a down stroke and buy something at 100k that actually is renovated and tenants actually pay.

@Andrew Johnson  that has always been my thought process when one wants to buy one rental home in a far flung area travel eats into all cash flow... one needs to be able to get to 5 to 10 units ASAP to make it worth the travel and over head expense.. otherwise just better off buying a reit or something..

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  • Account Closed
    Investor · New York City, NY · Member since 2017 · 173 posts · 36 votes
    9y

    Hello,

    I would start your search in Ohio, Columbus, Cleveland etc.  The economy is slowly returning there and there are many homes that fit your profile 

    0Reply
  • Nathan Mairs
    Investor · Columbus, OH · Member since 2017 · 20 posts · 11 votes
    9y

    If you're based in NY how will you manage/maintain the property? Specific areas in Columbus at your price point that are popular with other investors include the following:

    Hilltop

    Franklinton

    North Linden 

    Please note these are obviously high crime communities and your renters are likely to churn often with that said you can easily achieve your cash flow target of  >$200.

    Biggerpockets platform has an abundance of investor real estate agents - start with reaching out to you already have by initiating this point and I'm confident deals will start to flow your way. 

    0Reply
  • Eric Foss
    OP
    Westchester, NY · Member since 2015 · 5 posts · 0 votes
    9y
    Originally posted by @Nathan Mairs:

    If you're based in NY how will you manage/maintain the property?

    I would have to use a PM company.

    0Reply
  • Matt Motil
    Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
    9y

    30k is going to be tough in an area you actually want to own in, that will actually perform. We see stuff in descent parts of Cleveland in the 40's that are read you to go. 

    1Reply
  • Eric Foss
    OP
    Westchester, NY · Member since 2015 · 5 posts · 0 votes
    9y
    Originally posted by @Nathan Mairs:

    Please note these are obviously high crime communities and your renters are likely to churn often with that said you can easily achieve your cash flow target of  >$200.

    I suspected this might be the case.  Not really to keen on a high crime area.  It seems I'd need more cash to do what I want to do.

    0Reply
  • James Hunt
    Investor · Cleveland, OH · Member since 2016 · 96 posts · 27 votes
    9y
    Canton Ohio has 30k and under turnkey units
    0Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Eric Foss #RustBelt Bottom line is that you'll have to go somewhere to buy where the buying pool is only investors and an incredibly limited pool of investors with that appetite. You should search the forums on trying to manage $30K properties. I know you want to use a property manager but any issues will filter up to you. I can't possibly imagine a scenario where a $30K property is an easy/passive way to $200 per month. But I'm probably being overly pessimistic. Not to mention just flying out to look at it could cost you $1,500 (easily) with plane tickets, hotel, food, gas, car rental, etc. And if you feel the need to visit 1.5 times a year you can kiss your $200 per month goodbye. Blended travel costs would be $2,250 per year ($1,500 * 1.5) and $200/month * 12 months = $2,400. Sure, you can get by with not visiting if you have complete trust and faith in your property manager. But with a $30K property and tenants that rent $30K properties I'll just guess you'll want to see it from time to time.
    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    Turn key usually denotes fully renovated property ready to be put into service. pretty tough to buy the home renovate and crate a profit for those doing it all for 30k.. something has to give.

    either the home was bought for nothing and there fore is in the worse of the worse neighborhoods.. or there is no major reno going on and cap ex will kill you..

    use the money as a down stroke and buy something at 100k that actually is renovated and tenants actually pay.

    @Andrew Johnson  that has always been my thought process when one wants to buy one rental home in a far flung area travel eats into all cash flow... one needs to be able to get to 5 to 10 units ASAP to make it worth the travel and over head expense.. otherwise just better off buying a reit or something..

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    3Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Jay Hinrichs I'm (likely) one of the few people that looked at the cost of plane tickets, hotel room, etc. before buying.  If for no other reason that to look at how long it would take just to pay back the initial trip to even look at the property.  I can see eating the travel costs of you want to start with one and scale.  I don't get how people end up with single low-dollar properties in various areas.  Unless they never visit which (for me) is too risky.  My visit-per-unit costs started at $200 per unit, now it's at <$45. Unless my wife comes, then she screws up all the numbers with wanting "good food" instead of smoothies and BBQ...

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Andrew Johnson  well its a little like cheating at Solitaire if you don't include travel into your all in cost of owning rentals

    although I suspect some can reason away that they bought a rental in an area they want to vacation in often.

    But many cash flow markets are not really vacation spots.. or don't seem to be to me.

    Travel for me is my 2nd biggest expense behind staff.. 40 to 50k a years worth at least..  

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  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Jay Hinrichs So you're saying the average person wouldn't pick Toledo for their annual family vacation? 🤔

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Andrew Johnson  OUCH  I have never been !!!  but I can say that most of where I do business I would not want to go for vacation.. spots I like and I do business.

    Charleston

    Vegas

    Orlando  winter

    Philly/NY

    Chicago/ downtown

    and KC for BBQ

    but that's me..

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  • Bryan Young
    Investor · Canton, MI · Member since 2017 · 10 posts · 2 votes
    9y
    Eric Metro Detroit is the perfect market to take a look at....shoot me an email or direct message me I can send you some listing right up your alley.... I currently own 3 single families that were all move in ready for around $30,000
    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    9y
    Don't do it. I see so many investors making this mistake.
    1Reply
  • Kyle McCorkel
    Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    9y
    I agree with Lane Kawaoka and Jay Hinrichs $30k houses most likely are like putting lipstick on a pig (there's even a Ben Leybovich article about this, I'm pretty sure!) They won't appreciate at all, tenants will not be good, will not be in good neighborhoods, and chances are that the rehab is shoddy.
    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    9y
    Originally posted by @Eric Foss:

    Are you able to get a turnkey for $30k in a Class C neighborhood that generates at least $200/month cash flow?  This would not be a downpayment, I mean all in for $30k (could come up with closing costs separately).

    I've been wanting to get into rental property investing for a long time but never had the money (I might still not have enough, I'm 47).  I have $30k which is from an equity loan on my home.  I made the mistake of buying my home in 2005 and took a beating on it, but that's a story for another day.  The area where I live is very expensive so I think I would have to go for an OOS turnkey.  I have a strong background in contracting/construction although I don't do it for a living anymore. Ideally I'd buy distressed properties, rehab, rent and manage myself, but the prices here are way out of my range making it impossible and frustrating.

    Thanks for any input/opinions, Eric

    $30k C class tends to be pretty volatile

    Some years are good and others are a miss.

    Settle for a lower cap rate in a higher class area (B class)

    You will spend a bit more money but get a more steady cashflow also.

    I've done hundreds of deals in B class markets in Ohio and only had a hand full of evictions (Most friendly) and maybe a few break ins.

    Thanks and much success

    ps. If you want to be active and work the market yourself. You can find stellar deals for $30,000 all day long. 

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  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    9y
    Originally posted by @Kyle McCorkel:

    I agree with Lane Kawaoka and Jay Hinrichs

    $30k houses most likely are like putting lipstick on a pig (there's even a Ben Leybovich article about this, I'm pretty sure!)

    They won't appreciate at all, tenants will not be good, will not be in good neighborhoods, and chances are that the rehab is shoddy.

     More like a series of articles :) 

    And judging by the posts here I think I've made an impact - good!

    0Reply
  • Nik S.
    OH · Member since 2014 · 454 posts · 227 votes
    9y
    Eric Foss Hey Eric, check your inbox !
    0Reply
  • Tyrell Perry
    Rental Property Investor · Cleveland, OH · Member since 2016 · 69 posts · 108 votes
    9y

    Very possible @Eric Foss. I recently found a quadplex for a friend of mine in the Buckeye-Shaker neighborhood of Cleveland, OH. He paid $41K for the property and three of the four units are rented at $450/mo. The 4th unit is in rent ready condition. Unsure on the zip code grading level (44120) but from the optics, it appears to be in the C to B- range, however, as with most things in life, grading scales are relative. 

    Given your criteria, I presume you want to make a moderately unsafe investment with little capital down. I'd target tenant occupied properties, preferably with longstanding tenants in one of the units. I started out with this approach and it has been fruitful. For example, you can make a purchase between $10K - $17K and over the course of one year put in $10K to stabilize the property. You'll be under your $30K threshold and will see tenant income to bolster your confidence. Upon stabilization, cash flow will double your minimum criteria but that can be treated as a bonus. While this strategy works, it does require significant time and energy to reach stabilization. Good luck!

    1Reply
  • Ron Flatt
    Investor · Hillsboro, TX · Member since 2017 · 358 posts · 245 votes
    9y

    With 30K, yes a few places can be bought in some areas.  But look at a duplex or triplex that might be depending on area $60 to 90K.  put 1/4 down use the remainder for the unexpected.  

    A duplex- will be easier to find property management

    the property should give a better return on investment.  The total property should be appreciating, the renters will be paying expenses and debt service.  

    Rarely would you have both units vacant at the same time, so less risk of having no income.  

    0Reply
  • Nicholas Weckstein
    Real Estate Agent · Warrior Run, PA · Member since 2016 · 341 posts · 146 votes
    9y
    Eric Foss look in Pennsylvania. Their are properties in that price range. You may need to do some work to them. I'd say in PA you can get into a nice place that is in a decent neighborhood for around 50k. And probably see an 8-10% cap rate. Currently I'm looking to buy a duplex or a nice sfh in the Scranton area for around 50k. I don't really see the area appreciating but it's a stepping stone in my long term plan of moving to a big commercial apartment complex. Theirs some nice areas just outside of Scranton. That will help you avoid some BS from the city codes and regulations. PM me if you want to talk more about that area.
    0Reply
  • Eric Foss
    OP
    Westchester, NY · Member since 2015 · 5 posts · 0 votes
    9y

    duplicate

    0Reply
  • Eric Foss
    OP
    Westchester, NY · Member since 2015 · 5 posts · 0 votes
    9y

    @Andrew Johnson @Jay Hinrichs @Kyle McCorkel      Thank you for the advice

    @Nicholas Weckstein       Thanks, will take a look

    0Reply
  • Luis Antonio
    Accountant · Los Angeles, CA · Member since 2021 · 2 posts · 0 votes
    4y

    I also am looking for a turnkey property for under $30,000

    0Reply
  • Alex Evans
    Memphis, TN · Member since 2022 · 230 posts · 99 votes
    3y

    If you are looking at a purchase price of $30k for a turnkey property I would advise against it. Something is either not correct with the property or it is in an area that will lead to more headaches than it is worth. 

    0Reply
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