Turnkey Investment - Real cash flowing numbers please?

Question

Hi everyone,

I’m considering a turnkey real estate investment and wondering what are the real month to month cash flowing numbers you get from companies such as Morris Invest, Norada Investment, JWB, etc..

Thank you.

James Wise · Answer

What you need to remember is that there is an unlimited amount of variables at play at all times. No two properties will perform the same. No single property will perform the same every year, month, week or day. You will have ups & downs. Generally speaking if you take a bunch of properties over the long haul your gonna spend about half of your rents to operate the them. Some will perform way better than that, others worse & again which ones perform and don't perform will change with time.

Also worth noting that the nicer the home and neighborhood the more consistent returns you will receive. When the tenant pays becomes lower income that leads to more turnover, missed rent, repairs, vacancy, stolen property etc.....

Adam Widdicombe · Answer

@Vlad Bahatyrevich

Welcome to the site! I was in the same boat as you were a few months ago. I decided to go with a Tk company in KC. (I will do a full review of the whole process once it is complete)

The nice thing you can do is invest in Philly...I wish I lived in a market where I could invest more heavily.

In my experience and research the companies that don't account for EVERYTHING are the ones that are trying to portray inflated number. I was dealing with a company that did not account for CAPEX and marketing or tenant placement. Those are things that will dent your cash flow...try and determine the most accurate number for cash flow using all of the categories.

Good luck...feel free to reach out if you have any questions!

Adam

Thomas S. · Answer

Investors can not provide "real cash flow numbers"

Investing in real estate is nothing more than a game of rough estimates. The numbers are never "real" until the day you sell.

Ball park estimates, very rough, are the best you can hope for and in a real world scenes can go from positive to negative very easily. Investing is high risk.

Best you can hope for is accurate estimates but do not bank on them.

Tom Ott · Answer

Turnkey can be a great way to go. I would suggest doing your research into the companies and markets. Make sure they are not over saturated with investors.

Check out:

The Best Types of Markets for Profitable Turnkey Properties

and

What to Ask When Working With a Turnkey Provider

Jay Hinrichs · Answer

you have some great cash flow opps right there in your town... just fyi.

Ali Boone · Answer

Hi Vlad, I've always bought turnkeys and am very familiar with a lot of the companies...all of the companies should advertise the projected cash flow. Make sure they include estimates for vacancy and repairs in addition to the known expenses (if they don't, they are advertising immediately inaccurate numbers), but you should be able to see the projected cash flow. The trick at that point is to make sure you are buying a turnkey that has the potential and capability of sustaining those numbers (a lot don't), and there you go.

It's hard to answer your question outside of what is advertised because numbers vary greatly between all the markets and between the times in which someone bought. I bought all my properties in 2011 and 2012 and I have mega cash flow on mine, but those cash flow numbers aren't available in today's market.

Happy to chat more...I know I'm being a little vague and not answering your question...but more than looking at the projected numbers and knowing how to determine how sustainable those are, it'd be hard to answer.

Marco Santarelli · Answer

Hi @Vlad Bahatyrevich -- Welcome to BiggerPockets.

Although I know there have been some shady operators out there, I can only speak for our company.

All numbers posted on our website are as accurate as that provided to us by our builders, rehabbers, and public records. If the property is leased then the rent is an actual number. If the property is undergoing construction then the lease amount is the target rent the property manager will be leasing it for. The final (actual) monthly lease can be higher or lower.

As with everything you want to verify the numbers. One thing we do is double check the numbers on the property before you as our client put that property under contract.

Hope that helps.

Continued success!

Turnkey Investment - Real cash flowing numbers please?

Turnkey Investment - Real cash flowing numbers please?

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