2-4 unit Multifamily Turnkey Companies

41 Replies

Hi,

I recently bought a 4plex in Columbus, Ohio and have been very happy so far (5 months in) with the cashflow it's generated, especially given the price point; with expectations it will get better as things get on a more even keel/steady state in the next few months. 

I'm wondering if there are companies similar to Memphis Invest that have turnkey investment services for 2-4 units (ideally 4plex) in US real estate markets with solid underlying economic fundamentals. My target acquisition price is 80-120k with net positive monthly cashflow of at least $1500/month (not including financing, which I'm hoping to avoid by paying all-cash), with little to no out-of-pocket renovation costs. 

I live in Woodland Park, CO, which is not a good market for what I'm looking for as an investor (as far as I presently know) so I would most likely be an out-of-state owner. Therefore, I need a single point of contact/coordination on the ground I can trust implicitly for all aspects of investing, including but not limited to: identifying the right target market, the specific deal, tenant placement, the right contractors/vendors, and ongoing property management.

Any help is greatly appreciated!

Hi @Ryan Haley i suggest you contact @Alex Craig they often have stick in Memphis and Little Rock.  4plex at $120k which is 30k per door will probably require some work....

I expect Turn Key product to go between $40-$50k per door but that would be rehab to good standard.

@Hadar Orkibi Thanks for the info. Yeah, I've been told what I'm looking for is a unicorn haha. Considering that I just found a deal exactly like this on my first deal as an investor, though, I'm just believing that with a lot more knowledge/education/networking I can repeat that success, if not improve on it. I'll reach out to Alex, though; thanks again!

You can certainly find those deals at those price points but they are almost always urban core Hoody type properties with all the associated risk/reward scenario..

IF you ever read any of Chris at MI's post you will soon come to find out he will not sell that product because from what I have seen him write those are not the type of assets they care to manage or the tenant base they care to manage ..   purchase price per door has a direct correlation on long term risk.

you will never know on these assets how it works until you have owned them 3 to 5 years and have been through numerous turn overs.

@Ryan Haley

Time will tell if your cheap multifanily pans out. Alex Craig does sell multifamily units in Little Rock so you should reach out to him. There would be nothing in Memphis worth the risk at those price points Unless you understand they will most likely be in D type areas. 

@Jay Hinrichs Thanks for the perspective. My Columbus property is definitely as you describe and has already had some of the associated challenges. Luckily, the property manager deals with most of it, for which I'm happy to pay $300/month in mgmt fees and access to a market I wouldn't otherwise have. And I suppose you're right: time will tell if it's something I care to continue to put up with, but for now the direct headache on my end has been minimal compared to the monthly cashflow rewards. Good advice, though, to be sure!

@Ryan Haley   I also just picked up a great one in Sherwood which is near Little Rock. 

But its not turn key. if you want turn key you will have to pay for it. usually close to market value. 

If you are able to fined the deals and manage the rehab/ reposition yourself then it is also a good option. And the option i choose to go with.  I like to add value myself and enjoy the rewards of more equity and better cash-flow. 

Can I ask Ryan, what are you buying criteria when it comes for cash on cash returns?

@Hadar Orkibi Yes, I think I was just extremely lucky in my Columbus deal that it was totally turnkey and I had access to a great team on the ground who were involved in the deal where I didn't have to pay a premium for it. I'm told those deals don't exist in that market anymore, at least not now...the challenge is managing the rehab myself remotely; hence my need for the team on the ground in the prospective market. 

I'm looking to buy all-cash, so my Gross annual ROI needs to be at least 25%, with net hopefully 50-75% of gross. I'm looking to generate the capital for my next deal, which is why I'm looking at lower price points now. But in any event, on my next deal I'm really hoping for at least $1000/month net in my pockets to quickly generate passive income replacement.

I would strongly caution against 2-4 units but cause although they look good on paper you will get killed with the class of tenant and bad exit strategy. I have ten sfh turnkeys renting for over 900 a month and I will tell you that they are hard to sell. You could imagine these small mfhs.

@Lane Kawaoka Thanks for the advice. I am a relatively new investor and realize I may be naive and lack some perspective, so I want to throw this out for feedback. What area(s) are your SFHs and what is your net monthly CF on them?

While I generally agree that having at least one, if not multiple, exit strategies is a fundamentally sound aspect of a wise REI strategy, I am a buy and hold cashflow investor who just wants to amass a portfolio of high cashflowing properties for income replacement and ideally never let go of them. The below thoughts are all predicated on a very high monthly cashflow property, leaving a wide margin of safety, which I invite your input on:

1) If it's generating on average $1500/month NET cashflow, and generally a worst-case scenario of $1000/month (so at least ~$2800/month gross), I won't want to sell it in the first place

2) If for any reason I did have to sell it, at the price I'm looking to buy (and could therefore sell), it should be appealing to many cashflow-focused investors, especially since I'd have thorough and accurate historical financials

3) Buying all-cash would put me in a position to ride out any financial/economic storms for a potentially long term

4) Having a property manager in the local area would make it feasible to maintain ongoing management and ownership of the property, regardless of my personal situation

What are your thoughts? I'm definitely in a rapid learning phase now, trying to soak it all up, so I welcome and and all feedback!

Originally posted by @Ryan Haley :

@Hadar Orkibi Thanks for the info. Yeah, I've been told what I'm looking for is a unicorn haha. Considering that I just found a deal exactly like this on my first deal as an investor, though, I'm just believing that with a lot more knowledge/education/networking I can repeat that success, if not improve on it. I'll reach out to Alex, though; thanks again!

 Ryan, 5 months is far too soon to say if it's a success. Not until you have a few tenant turn overs will you even begin to get a sense of whether it's successful. Multi families in that price range are generally plagued with tenant problems. 

Originally posted by @Ryan Haley :

Hi,

I recently bought a 4plex in Columbus, Ohio and have been very happy so far (5 months in) with the cashflow it's generated, especially given the price point; with expectations it will get better as things get on a more even keel/steady state in the next few months. 

I'm wondering if there are companies similar to Memphis Invest that have turnkey investment services for 2-4 units (ideally 4plex) in US real estate markets with solid underlying economic fundamentals. My target acquisition price is 80-120k with net positive monthly cashflow of at least $1500/month (not including financing, which I'm hoping to avoid by paying all-cash), with little to no out-of-pocket renovation costs. 

I live in Woodland Park, CO, which is not a good market for what I'm looking for as an investor (as far as I presently know) so I would most likely be an out-of-state owner. Therefore, I need a single point of contact/coordination on the ground I can trust implicitly for all aspects of investing, including but not limited to: identifying the right target market, the specific deal, tenant placement, the right contractors/vendors, and ongoing property management.

Any help is greatly appreciated!

 Sounds like a great deal, where did you buy this one? Most of these are renting for 500-650 per month depending if they are flats or townhomes. Are you still looking for additional properties in Columbus? or looking mostly to expand to other markets. Either way would be great to connect 

You may want to reach out to Ohio Cashflow for advice

@Robert Ellis It was on Barnett (in Whitehall, I believe). I'm actually getting $700/door for this duplex and the Realtor I work with was able to get me a great deal with 3/4 units brand-new rehabbed so I've had no rehab costs. I'm open to wherever the best markets and deals are at this point. From what my Realtor said, what I'm looking for no longer exists in the Columbus market but I figured it doesn't hurt to ask. Based on a lot of the good input on this forum I may wait for awhile before I buy another "high-risk/high-yield" property like this one, since I got appear to have gotten a unicorn here as far as the property as well as the Realtor/PM who manages it for me. But that being said, I'm always open to look at a promising deal!

@Richard Leyba tejada thanks for the heads up

Originally posted by @Richard Leyba tejada :

You may want to reach out to Ohio Cashflow for advice

Thanks for the mention Richard,

We are only taking on a few more investors this year.

It's tough meeting the demand of a hungry crowd lol

Thanks again and much success

@Engelo Rumora are you noticing that the Columbus market is tightening up quite a bit lately? If so, where do you recommend looking right now?

Those are some of the bumpers I run with as well @Ryan Haley . I haven't looked for any turnkey providers but I'm interested. Thanks for posting the question. 

Originally posted by @Ryan Haley :

@Engelo Rumora are you noticing that the Columbus market is tightening up quite a bit lately? If so, where do you recommend looking right now?

I have never looked into Columbus.

We have been buying in Toledo for 5 years now and don't intend on stopping lol

No one is here so it suits us perfectly

Much success

Originally posted by @Ryan Haley :

@Engelo Rumora Oh OK, so sounds like the Toledo market is pretty good??

Great for cashflow

Pretty boring otherwise

There has been some movement downtown over the last few years

I suggest everyone just stay away from Toledo please hahahaha

Jokes.

Check it out

Ohio is a great market in general

So is Michigan and Indiana.

Find yourself a good team, B class area and you're good to go

10% cap rates are falling of trees

Much success

@Engelo Rumora Hahaha, right on. Yeah, I'm looking for high-cashflow properties at low acquisition prices and a great team on the ground to make the whole thing as passive as possible, esp. since I'll most likely be an out of area owner. 

Originally posted by @Ryan Haley :

@Engelo Rumora Hahaha, right on. Yeah, I'm looking for high-cashflow properties at low acquisition prices and a great team on the ground to make the whole thing as passive as possible, esp. since I'll most likely be an out of area owner. 

Cool mate,

It seems like you should look into turnkey.

I also just saw your first post above

You can't go wrong with Memphis Invest mate

By far the #1 turnkey provider in the country

Great chatting and keep the dream alive :)

@Engelo Rumora Thanks man. I'm looking for 2-4MFH units right now, and my understanding is MI only does SFH. If you know of any MFH TK services with the reputation of MI, let a brother know!

Originally posted by @Ryan Haley :

@Engelo Rumora Thanks man. I'm looking for 2-4MFH units right now, and my understanding is MI only does SFH. If you know of any MFH TK services with the reputation of MI, let a brother know!

I have struggled putting my name behind anyone over the last 6 years since I've been in the US

Google is your best friend :)

@Ryan Haley Do your cash flow numbers only work because you are buying all cash? Would they still work if financed? There are a few podcasts that discuss the topic of all cash vs financed properties. I suppose if you have the funds available you can buy all cash to get a better deal perhaps, but you should then consider doing a cash-out refi so that you can re-deploy that money to another property and reduce your risk of a lawsuit. As mentioned in many places in BP, if you have a leveraged property, and someone sues, the lawyers are less likely to want to take the case if there is nothing to gain. If you have the property all paid for, then you are more at risk. Plus leveraging properties means you can buy more of them with the cash you have. 

I too essentially bought a "unicorn" in my area, but my 4 plex was $264k and I put 10% down, no pmi, and since I self-manage, it cash flows $1k/mo for me (not taking out for maintenance, etc). I've got great tenants in a nice area. Probably a B to B+. It is a fairly new property (1996) and the previous owner did updates so there is virtually no maintenance. I love it, but hard now to find another like that. Previous owner was below market rents, when I bought it last June, gross rents were at $2675, now they are at $3050 and will go up a little more this year. But if you want to stick to being an all cash buyer, there are opportunities in my area. Got an older 4 plex here that needs updates for $140k, a very nice triplex for $148k, 7 plex for $250k... These are all asking prices so you could possibly come down more. If you want details on any of those, PM me and I can send you info.

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