Best areas for turnkey properties?

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Best areas for turnkey properties?

Francis Pena
Rental Property Investor · Paterson, NJ · Member since 2019 · 5 posts · 4 votes

Hello everyone,

I have been saving up some money and currently have about 150k that I would like to invest in a few turnkey properties, and was wondering what areas do members suggest. I was told Flint, MI with a good property manager is worth the invenvesment. Does anyone have experience with this area?

Thanks in advance

Francis

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Brian Ploszay
Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
6y

I have been a vocal critic of turnkey properties on B.P.   Flint Michigan is a good example of a place that you should exercise extreme caution in investing.   I have nothing against the city nor its people;  I have been there.   Flint is a shrinking and deindustrializing city.   The area has lost about 50 percent of its population since 1970.  What this means is the demand for housing is shrinking.  There is a lot of surplus housing, and not surprising housing stock gets torn down.  And pricing is low.  

The demographics are working against you, and there will be low appreciation. These areas often do deliver a superior cash flow yield, predicated if the investment is performing. If you choose to invest in C properties in towns like this, I would say you need to understand that they are risky. It is successfully done, but usually by hands-on, local operators. Markets like this have a lot of distressed real estate, so operators can buy properties cheaply, repair/rehab and then rent. As a turnkey buyer, you are not capturing this, because you will be paying a more full price. Make sure you get an independent valuation of what the property might sell for on the local MLS, if it was vacant. Look at all the comps, including the similar distressed properties in the immediate area.

You might want to look for properties in Eastern Pennsylvania towns instead.   They are closer to where you live.   It's cheaper than NJ.

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  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    6y

    I have been a vocal critic of turnkey properties on B.P.   Flint Michigan is a good example of a place that you should exercise extreme caution in investing.   I have nothing against the city nor its people;  I have been there.   Flint is a shrinking and deindustrializing city.   The area has lost about 50 percent of its population since 1970.  What this means is the demand for housing is shrinking.  There is a lot of surplus housing, and not surprising housing stock gets torn down.  And pricing is low.  

    The demographics are working against you, and there will be low appreciation. These areas often do deliver a superior cash flow yield, predicated if the investment is performing. If you choose to invest in C properties in towns like this, I would say you need to understand that they are risky. It is successfully done, but usually by hands-on, local operators. Markets like this have a lot of distressed real estate, so operators can buy properties cheaply, repair/rehab and then rent. As a turnkey buyer, you are not capturing this, because you will be paying a more full price. Make sure you get an independent valuation of what the property might sell for on the local MLS, if it was vacant. Look at all the comps, including the similar distressed properties in the immediate area.

    You might want to look for properties in Eastern Pennsylvania towns instead.   They are closer to where you live.   It's cheaper than NJ.

    9Reply
  • Brandon RibeiroPro Member
    Real Estate Broker · Philadelphia, PA · Member since 2016 · 228 posts · 95 votes
    6y

    @Francis Pena I’m currently working with some other BP members that live in Jersey and are investing in PA. Let me know if I can be of any help!

    Podcast Guest on Show 2 “Cash Flow” Housing Markets That Are On Track for Big Growth
    0Reply
  • Drew Brown
    Property Manager · Lansing, MI · Member since 2015 · 170 posts · 59 votes
    6y

    @Francis Pena Lansing has some wonderful opportunity’s for investment properties. I personal invest and manage properties in the area. If you would like to talk more about the opportunities in my market of MI reach out. 

    1Reply
  • Matthew T.
    Investor · Springfield, MA · Member since 2010 · 276 posts · 84 votes
    6y

    I have found Memphis to be a great area for turnkey investing.

    1Reply
  • Todd Vernon Chunn
    Wholesaler · Detroit, MI · Member since 2016 · 45 posts · 12 votes
    6y

    @Brian Ploszay

    I have been buying, renting, flipping and wholesaling in the Flint and Detroit markets for 20+ years. Since you are not local, you would need to be careful in which areas of Flint you buy in. I know a ton of successful out of state investors that have multiple rental properties in Flint and Detroit. I could connect you with a few property managers that you could talk to and vet to see if it is a good fit for you and if you like, I could send you a few flint deals for you to look at... I will let you know which ones to stay away from also.

    1Reply
  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    6y

    @Todd Vernon Chunn   You fit right into my feelings about Flint/Detroit real estate.  You're a local, you know your market and you thrive.   Now, it is not ==impossible== to be an out of state investor, but for class C properties, there are challenges.  You need very good local connections / boots on the ground.   You need to know your market.  Locals have immense advantages for this asset class.  Just my opinion.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    6y

    @Francis Pena Flint is riskier than Detroit in our opinion. Pontiac is a bit better than Detroit because the city services and courts are a bit better.

    Just be sure you also understand the difference between the city of Detroit and the suburbs of Detroit.

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  • Francis Pena
    OP
    Rental Property Investor · Paterson, NJ · Member since 2019 · 5 posts · 4 votes
    6y

    @Brandon Ribeiro Thank you for taking the time out to write and to me. I would be interested in PA. Do you have any recommendations of affordable areas in PA to invest for rental income?

    0Reply
  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    6y

    I would have to concur with @Matthew T.! Memphis is a great town for investing. Like other areas of the country you have to really understand the market and buy in the right neighborhoods. If your searching leads you to explore Memphis, let me know I’d be happy to help! I’ve created a guide to grading Memphis zip codes I can share with you if interested. Just send me a good email!

    0Reply
  • Brandon RibeiroPro Member
    Real Estate Broker · Philadelphia, PA · Member since 2016 · 228 posts · 95 votes
    6y

    @Francis Pena the market is extremely tough right now in terms of inventory. The investors Im working with are looking at properties in the 250k range because they aren’t looking to do any rehabs. Bucks and Montgomery county are very strong rental markets

    Podcast Guest on Show 2 “Cash Flow” Housing Markets That Are On Track for Big Growth
    0Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    6y
    Originally posted by @Francis Pena:

    Hello everyone,

    I have been saving up some money and currently have about 150k that I would like to invest in a few turnkey properties, and was wondering what areas do members suggest. I was told Flint, MI with a good property manager is worth the invenvesment. Does anyone have experience with this area?

    Thanks in advance

    Francis

    The Midwest is a great place for an investment. Many investors look at places like Clevland or Cincinnati for investments.  Prices are still lower, but the rents keep going up that every property hits the 1% rule without even trying.

    0Reply
  • John Alosio
    Rental Property Investor · Stroudsburg PA · Member since 2020 · 119 posts · 74 votes
    6y

    @Francis Pena my experience is with duplexes in more rural areas.  You could get involved with some of the urban areas such as easton, Bethlehem or allentown. There is definitely a seat for every a$$. But I'm not involved in these markets. I prefer commuter locations where you could get to major areas with an average 20 minute drive. Thats my niche, I guess. Easy access to highways. Beautiful country side. Quiet living. It all depends on what you're looking for. There are many options in this area of PA.

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    6y

    Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets. Let me know if you need any help.

    3Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    6y

    Flint is a horrible idea; there is not solution for the problem. I am not a big fan of turn key for the same reason I would not buy 95% of flips - it is convinient, sure, but I have been remodelling too many properties to not see the shortcuts.

    In the long run you will always be better with quality, in location and in the property! A cheap deal and a good deal are not the same thing.

    2Reply
  • Joe Chirdon
    Real Estate Agent · Harrisburg, PA · Member since 2016 · 159 posts · 82 votes
    6y

    Lots of turn-key available in the Greater-Harrisburg, PA area. 

    0Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    6y

    Hi @Francis Pena I speak from experience, Columbus OH is a GREAT market to get into! Terrific cashflow, quality tenants, and a number of large industries have settled here for there headquarters.

    With the right deal you could see a 3% deal or you could find a deal with over $100k in equity.

    Let me know if you'd like to know more!

    2Reply
  • Logan Freeman
    Specialist · Kansas City, MO · Member since 2018 · 331 posts · 148 votes
    6y

    @Lane Kawaoka I second KC!

    0Reply
  • Jingru Sui
    Real Estate Agent · Atlanta, GA · Member since 2014 · 683 posts · 317 votes
    6y
    Originally posted by @Stephen Akindona:

    I would have to concur with @Matthew T.! Memphis is a great town for investing. Like other areas of the country you have to really understand the market and buy in the right neighborhoods. If your searching leads you to explore Memphis, let me know I’d be happy to help! I’ve created a guide to grading Memphis zip codes I can share with you if interested. Just send me a good email!

     Hey Stephen, I'd like to know more about Memphis market! Looking to connect. Could you share with me your guide? 

    Thanks!

    0Reply
  • Stephen Akindona
    Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
    6y

    Hey @Jingru Sui. Sure send me a PM with your email and I’ll email it to you! 

    0Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    Check out Brockway, Ogdenville, and North Haverbrook

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    Originally posted by @Francis Pena:

    Hello everyone,

    I have been saving up some money and currently have about 150k that I would like to invest in a few turnkey properties, and was wondering what areas do members suggest. I was told Flint, MI with a good property manager is worth the invenvesment. Does anyone have experience with this area?

    Thanks in advance

    Francis

     I love investing in the Midwest. I invest in Columbus, Ohio. The cash flow is amazing!

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    6y

    A good PM is going to be key for out of state investing.  I suggest identifying a PM company before pulling the trigger on an out of state deal.  I invest and live in the Milwaukee area.  There are some good cashflow opportunities here.

    0Reply
  • Francis Pena
    OP
    Rental Property Investor · Paterson, NJ · Member since 2019 · 5 posts · 4 votes
    6y

    @Steven Wilson After reading your post I started looking to the area you suggested(Ohio). You you have any recommendations on management company? Agent? Wholesalers?

    Once again, I appreciate you taking out the time to share.

    -Francis

    0Reply
  • George H.
    Rental Property Investor · Cleveland, OH · Member since 2017 · 53 posts · 14 votes
    6y
    Originally posted by @Account Closed:

    Check out Brockway, Ogdenville, and North Haverbrook

    Didn't they get a new monorail system some years back?

    3Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    6y

    @Francis Pena I personally work with a small local property manager. She charges a little bit more , but the quality of service she gives is well worth it. Also I work with Reafco brokerage and we specialize in serving investors with off market deals. I actually have a wide variety of properties I come across from duplex’s to 8 units and more. 

    If you’re looking for a flip there are also tons of off market mailing lists that send deals out daily.

    1Reply
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