Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
Good day BP Nations. I currently own a duplex I bought with cash back in May 2012. I'm currently looking forward to an arbitration settlement this September and thinking of purchasing some turnkey properties in the mid-west and south east of the country to substitute my income and more than cover my expenses.
After acquiring some turn-keys and generating minimum $10K/month I plan to find a mentor to learn syndication in apartments. Since 2012 up till now I've been reading books, listening to podcasts from different people, and picking fellow BPer's brain on real estate. What do you think? Please share.
Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
10y
@Ayodeji Kuponiyi I do multifamily syndication and understand your thought process of wanting a stable income before you dive into the big stuff.
You certainly can learn a lot from reading books, podcasts, BP, etc. but you learn a lot faster by doing it. So if multifamily is your goal then I'd get whatever income level makes you comfortable (and quite frankly maybe a little less so you have some self-imposed pressure) then get rocking on doing it.
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
@Sunday Akin . . . For me to create a passive $10k a month I have needed about 30% of each property that is financed through conventional financing and 100% of the cash for the properties I've picked up lately. I could finance the recent purchases, but I'm waiting for the right time to pull back some cash.
If you are asking what you'll need, I would say you should have at least $15,000 in your account to start buying properties, unless you are assigning contracts, using transactional funding for quick flips, or have a full fledged cash partner helping you out. If you don't have at least $15,000 - don't start holding yet.
I actually have a little more than $20,000 cash right now. But I am just wondering how many properties you bought that eventually started generating $10k per month. My guess will be at least 20 properties. How long did it take you to reach this goal, especially when using 30% cash with traditional financing? Please shed more light... your story is really inspiring.
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
@Sunday Akin - It's not the "42 doors to 2 months and I'm only 21 story" which is usually the "I lost everything I didn't have" two months later story as well.
I've built up local and out of state rentals for over 15 years picking them up one at a time. As a mortgage broker, I would run across clients who could not get a bank loan, but had a decent down payment. I would buy the home for them and count their down payment toward the eventual purchase of the home and get a loan for myself on the property. About half of the time they would not exercise the lease option so I have held the local rental for years.
I haven't purchased homes in Utah for over 10 years as there are better deals in other states like Ohio and Alabama, where I have been buying cash. I have a partner in both of those states finding properties, rehabbing them on my dime, and putting a tenant in the property. We then either sell or hold the home. Some of the properties I purchase I have kept for myself.
Beyond that, we could speak over the phone and I could assist you with making a game plan for investing.
Engineer · Allentown, PA · Member since 2014 · 105 posts · 64 votes
10y
I'm actually very curious to know how many turnkey rentals it would take to generate 10k a month in net income. Even with 2-4, 4 unit apt complexes, I'd imagine the income would maybe be 2000 at the most. But probably closer to what @Cailyn Aune said with the 800-1200.
I've been learning that using conservative numbers, 100$ a door seems to be the sweet spot unless these are full cash deals. But maybe I'm wrong?
Flipper/Rehabber · Myrtle Beach, SC · Member since 2014 · 95 posts · 35 votes
10y
@Ayodeji Kuponiyi I like the plan! Turnkey is an interesting space that I never considered until recently...
@Alex Franks could probably provide you with some great Turnkey strategies to get started, as for syndication, you could always be learning while your doing. I started learning the syndication side of things while I was rocking and rolling in the SF value add space here in Myrtle Beach SC.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
10y
Of those markets, Indy is really the only one I'm doing anything with right now. Which city(ies) in Ohio are you talking about? Columbus is the only one I'd potentially go after right now. TN, the only city that really works for numbers is Memphis but I've never been a huge fan of that market personally. Atlanta used to be awesome but I don't recommend it as much now. Michigan, not a fan. Kentucky, not sure of anything there.
Investor · Austin, TX · Member since 2016 · 2 posts · 1 vote
10y
love the idea. i am in a similar boat, got a few deals under my belt and hopeful to step it up to the bigger deals over the next few years. one concern for me is that the turnkey stuff seems to be getting much more expensive lately, a lot of investors have taken most of the deals and i see a ton of retail investors in the marketplace paying more for deals that used to be pretty cheap. I've been looking at every multi family deal in my market and all of them are offer a very low rate of return. nothing like deals from 2012 and even lower than deals in 2016. is it just a cycle the market goes through or do multi family always generate lower returns?
Great post! I have very similar goals (minus the turnkey part). I would offer a few recommendations on some great multifamily / apartment investing books that I have read so far:
1) ABCs of Real Estate Investing by Ken McElroy 2) Wheelbarrow Profits by Jake Stenziano & Gino Barbaro
3) Multi-Family Millions by David Lindhal
4) The Complete Guide to Buying and Selling Apartment Buildings by Steve Burgess
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Hubert Washington thanks for the books suggestion. I've read 3/5 books you recommended. I'll check out the other 2. I'm thinking of starting small with 5-15units apartments as oppose to the turn key multifamily.
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Ricky Smith It may be true that turnkey properties are more expensive due to more individuals learning of it and the fact that the home is already renovated & rented. Simply put its easy and hands off with the property manager in place therefore sellers of turnkey may hike up the price. Research & talking to people like @Brie Schmidt should be helpful to avoid overpaying on a turnkey property. Referrals & research are our best chance of acquiring at the right price and location.
Good day BP Nations. I currently own a duplex I bought with cash back in May 2012. I'm currently looking forward to an arbitration settlement this September and thinking of purchasing some turnkey properties in the mid-west and south east of the country to substitute my income and more than cover my expenses.
After acquiring some turn-keys and generating minimum $10K/month I plan to find a mentor to learn syndication in apartments. Since 2012 up till now I've been reading books, listening to podcasts from different people, and picking fellow BPer's brain on real estate. What do you think? Please share.
Ayodeji
I was a turn key guy who also provided for resellers. I think the window for solid deals has passed. Most of the folks selling or giving you advice here are selling an asset or being paid referral fees to sell that asset (nothing wrong- it is a business and they are providing a service or the asset itself). During 2009 - 2013 was the prime time to purchase the solid cash flow rentals. Right now folks are way over paying for higher class assets or buying the lower end scraps. Lower end is basically recycled product that did not work out for the investor the last time around. Lower end is usually not a winner, but more of cash drain for your pockets. I see Indy and Kansas city being spoke about as they are the first recycled cities that I can attest to.
What I mean by this, in 2009 when I was doing seminars around U.S. areas, so were the guys from both of those markets. Now I am seeing the same older junk make its way back around only as higher priced. Again, I am not against turn key. We were scheduled to build 150 units for one company (turn key rentals). That number is now up to 500 units in a few markets in the southeast. We are rebuilding the vinyl villages that were built in 2000 - 2004. Very similar product, actually identical product. Just cheaper to build than buy, which then tells me the cycle has changed or moved on.
Basically what I'm saying, it is cheaper today to build than buy in most markets. That is why I don't think the turn key is a great buy today. I think folks are getting the bottom of the barrel or very over priced assets. Keep in mind, most the major hedge funds came in 2013 they took majority of any of the solid deals. The nicer homes A - B type assets most local folks can sell them retail. So why would they pay a reseller or flip to investor? Better money in retail sales in most markets, which is similar to 2005-2007. Folks sold these same assets to subprime buyers (lower end) or retail to home buyers (A-B) asset. So you can see, first and foremost, there is inventory shortage in most markets. Folks now have to push other cities (lower end product). As you folks in California have such a high entry points. Most markets still look attractive. Trust me when I say on paper numbers look great. In the long run I feel the return for folks from 2014 - present will be a lot less than the prior years. In 2009-2013 if you purchased during this time I think you made great buys. As well as hitting the timing of the market correctly.
Real estate is a lot about timing and cycles. At the same time the market tells folks what is working and what is not. You have to listen and not recreate the wheel.
Pm me if you would like to speak. I am also working on buying apartments for my company currently.
Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
10y
@Alex Franks A lot to think about & it seems you're right. As I mentioned to @Ricky Smith it seems the price for turnkey properties are expensive especially since everyone is looking into turnkey rentals. Real estate is definitely all about timing and the better you can time it the better success you'll achieve. With that said, I've decided to start small (5-15 units) apartments and syndicate the larger ones with investors like yourself.
@Alex Franks A lot to think about & it seems you're right. As I mentioned to @Ricky Smith it seems the price for turnkey properties are expensive especially since everyone is looking into turnkey rentals. Real estate is definitely all about timing and the better you can time it the better success you'll achieve. With that said, I've decided to start small (5-15 units) apartments and syndicate the larger ones with investors like yourself.
Professional · Washington, DC · Member since 2016 · 38 posts · 2 votes
10y
Hey. It sounds like you have a great plan formulated. I identify with your story in that I'm getting my start in the market in Washington, DC. I'm planning on starting with smaller units, then switching to larger multi-units within the next 2-3 years. What are some of the books and articles that you have found to be the most impactful?
Also, I am happy to discuss the DC market with you, if you would like. I currently own a handful of rentals in the city. Additionally, we manage a few dozen properties.