Advice on where to Invest out of State
Investor · New York City, NY · Member since 2017 · 146 posts · 56 votes
I'm looking for a reliable turn key provider to be my boots on the ground. I haven't really decided where, but I was originally looking in Ohio and Kansas City. In the end, I think I'm just looking for good people and that will ultimately convince me on where to invest.
After combing through various Turn Keys is it normal that many of them look/sound like scam artists? Does anyone have a solid referral? I'm really looking to build a multi-family portfolio for strong cash flow. If the area doesn't really have multi-family it's not the end of the world, so long as the people are worth investing in. I would do it myself to rehab and hunt for deals and one day I hope to, but I work 70 hours a week and I barely have time to do much away from the computer.
I'm looking for a reliable turn key provider to be my boots on the ground. I haven't really decided where, but I was originally looking in Ohio and Kansas City. In the end, I think I'm just looking for good people and that will ultimately convince me on where to invest.
After combing through various Turn Keys is it normal that many of them look/sound like scam artists? Does anyone have a solid referral? I'm really looking to build a multi-family portfolio for strong cash flow. If the area doesn't really have multi-family it's not the end of the world, so long as the people are worth investing in. I would do it myself to rehab and hunt for deals and one day I hope to, but I work 70 hours a week and I barely have time to do much away from the computer.
If you are buying out of state you can ensure you don't ever get scammed by doing the following.
It's true that there are a number of turnkey providers out there that don't have the best websites or reviews on BP. That said, there are a LOT of these companies and not all of them are bad. There are some individual cities with more than 10 turnkey providers. If you've only looked at 5-10, you may not have found the right one for you yet so I'd recommend that you keep looking. BP is an excellent source for vetting turnkey providers, simply by looking up the companies using the search function. I have a similar situation as you (too busy with work to be more hands on). I currently own three properties purchased from two separate turnkey providers. Feel free to send me a PM. I'm happy to share at least my experience with the two turnkey providers.
After combing through various Turn Keys is it normal that many of them look/sound like scam artists? Does anyone have a solid referral? I'm really looking to build a multi-family portfolio for strong cash flow. If the area doesn't really have multi-family it's not the end of the world, so long as the people are worth investing in. I would do it myself to rehab and hunt for deals and one day I hope to, but I work 70 hours a week and I barely have time to do much away from the computer.
That's because most of them are.
If I worked 70 hours a week, the last thing I'd want in my life is a crappy duplex in Cleveland.
I'm looking for a reliable turn key provider to be my boots on the ground. I haven't really decided where, but I was originally looking in Ohio and Kansas City. In the end, I think I'm just looking for good people and that will ultimately convince me on where to invest.
After combing through various Turn Keys is it normal that many of them look/sound like scam artists? Does anyone have a solid referral? I'm really looking to build a multi-family portfolio for strong cash flow. If the area doesn't really have multi-family it's not the end of the world, so long as the people are worth investing in. I would do it myself to rehab and hunt for deals and one day I hope to, but I work 70 hours a week and I barely have time to do much away from the computer.
If you are buying out of state you can ensure you don't ever get scammed by doing the following.
@Account Closed
As someone who is also in NY and is an active out of state investor, I can tell you that meeting other investors who have successfully invested out of state will help you immensely. Talk to them and get some sound advice before throwing your money into a deal.
Let me know if you have specific questions.
@Account Closed 's post, and add a couple other red flags to look for if you're going the turnkey route. Yes, there are DEFINITELY plenty of scammy providers out there, but that doesn't mean there aren't several solid companies out there, too. I think you're right on the money with your attitude of finding the right people as your top priority. Yes, the numbers have to work too, but fantastic numbers mean nothing if you've got bad management.
In addition to Jame's list, I'd recommend you ask about the following when you're looking at TK:
Obviously, you won't be able to actually visit every single provider you consider (though I strongly recommend that people try to visit their top one or two once they've narrowed the field). BUT, through the ever-expanding magic of the internet, you can still assess the honesty of a provider (to some degree) by using Google Earth to virtually walk the streets of the neighborhoods you'd be investing in. Especially if you can get a few address of properties currently for sale (or recently sold), you can see if the properties and the neighborhoods match up with the sales pitch. I have personally seen a national marketing company who sells TK properties in Birmingham touting props as A- when they ABSOLUTELY are C+, B- at best. The photo might look ok, but a quick check on Google Earth showed neighboring properties with untended lawns, peeling paint, rusting trucks, and cracked pavement. Plus, living and working here, I know that area, and I know no one lives there that can afford to live elsewhere, which is not how you'd describe a true A-class neighborhood. This is one major reason I always caution people about going with big national marketing companies who don't actually live and work in the markets they sell....but I digress.
The point is, there are plenty of tools at your disposal to try to suss out the good from the bad - and BP is a fantastic one. You've got your head in the right place regarding the 'people first, market second' mentality - just don't let the fact that there are some not so great people out there discourage you. Yeah, you have to do some serious legwork, but finding a trustworthy provider that will keep consistent, reliable, passive income flowing your way will be more than worth the effort.
Best of luck!
Clayton
I'm looking for a reliable turn key provider to be my boots on the ground. I haven't really decided where, but I was originally looking in Ohio and Kansas City. In the end, I think I'm just looking for good people and that will ultimately convince me on where to invest.
After combing through various Turn Keys is it normal that many of them look/sound like scam artists? Does anyone have a solid referral? I'm really looking to build a multi-family portfolio for strong cash flow. If the area doesn't really have multi-family it's not the end of the world, so long as the people are worth investing in. I would do it myself to rehab and hunt for deals and one day I hope to, but I work 70 hours a week and I barely have time to do much away from the computer.
You are doing the right thing! There are so many companies out there who use the word "turnkey" but they are just referring to properties from the MLS.
You want to make sure the company owns, renovates, and manages the property all in house and they do not use any third parties! The only third party should be your home inspector of course.
Try looking at:
The Best Types of Markets for Profitable Turnkey Properties
and
@Account Closed I know of at least one very reputable turnkey company with over 1400 properties under management and have been in business 11 years, that has a terrible website. If you judged them by their website they might look fly-by-night. They are anything but. On the other hand a really nice web site is not any guarantee of a truly trustworthy & reliable company. I also know mostly under the radar companies that are not very good at keeping up their websites, but do offer excellent service. Plenty of the kind your afraid of as well. I've seen all kinds.
In my view their are no really good turnkey companies offering small multi-family (2-4 units) at this point. Going turnkey, stick with SFR in the midwest or some places in the southeast IMHO.
@Account Closed My wife and i had a duplex and triplex along with full time jobs and couldn't do more. We found a TK provider in Indy and made our first SFH purchase 5 years ago. In the past five years i've purchased two more triplexes and 1 duplex and 5 more TK's and been able to get out of the corporate life. The TK's outperform my locals because of the experience of the team and the market. PM for details.
in a few months I’ll have an 8 unit renovated, fully rented, managed and cash flowing. Depending on your timeframe it might interest you.
Find a great agent and a great PM. Message me if you want a recommendation for a good PM. Ensure you have separate entities that can check on the other parties to ensure they are living up to their obligations.