Start of my TK Journey - Studying Various Areas

44 Replies

So recently I have taken interest in expanding OOS. I live in Loudoun County, VA and OOS deals, if done properly can provide lucrative returns. Also TK model allows me to invest even by keeping my full time employment.

So far I am nothing but somewhat disappointed in finding someone reputable company to connect with that can make the numbers work.  Found real good company in Cleveland, OH in Smartland, and thanks to @Tom Ott for reaching out to me and following through like he said he would, but the property taxes in Cuyahoga county seem astronomical, with no added value for me, as an investor.   I am a little hesitant to pull trigger on Cleveland properties due to that.  The property worth $90,000 is being taxed around $2,400, a whooping 2.66% real estate tax.  Places like Columbus,OH. Indianapolis, IN, Jacksonville,FL  all seem to have around 1 to 1.5% tax. 

So my recent experience with "reputable" providers is that they seem too busy to take new clients. Had a brief conversation with a very well renowned TK Provider in Indy, and was informed by one of their associates over IM (chat) that they are currently NOT taking new clients. I emailed this husband/wife team anyway to find out from husband that they are taking new clients (that was after my 2nd email), and the husband asked me to propose a time in the afternoon, which I promptly did.  Never heard a word back from the guy again ! Sent him another email a few days later... NOTHING !!.. What gives !    Some people pride themselves to be Full Service (FS).. That's hardly any service.. Just sayin'... 

After the horror stories, not even going to reach out to people like Morris Invest. I remember this dude from Fox News (Fox and Friends Weekend). Now did he become real estate guru after quitting FOX NEWS or was he first a real estate guy then became a media personality? He is charismatic and all, but he ain't no Tom Brady. Sorry I digress. 

Right market for me would be a place with strong job market, lower tax bill and low crime with rent around $850 - $1000

Right company for me would would following characteristics. 

  • Efficient communication and prompt email responses. Should always be reachable.  I am the kind of guy who never takes advantage of anyone. If you respect my time, I will respect your's 10x 
  • Should own the property. No middle men brokers sending MLS listings.
  • Should have In House PM. 
  • Properties should be in B neighborhood with price point of $80,000- $90,000
  • Should be willing to take me to the property. I plan to fly down once I am done researching and ready to pull the trigger. 
  • Should have good reputation in the industry with verifiable 3rd party references.

If any investors have any recommendations, please post or PM me privately.. Both work. 

Originally posted by @Bob Okenwa :

@Chinmay J.

I find myself in the same boat as you (especially with Cleveland properties and the high taxes) so I'd be interested to see what kind of posts come through on the board for this one.

I also looked up Toledo Ohio, where Ohio CashFlow run by  Engelo Rumora operates, and the taxes there are no better. For about $100,000 I'd be paying more than $3K in taxes. I beleive Lucas County residents get some credits for primary residence and owner occupied etc, but we as investors wont' be getting none of that. 

I just pulled up a random property on Realtor in Toledo, OH and looked up their tax bill. I crapped in my pants. 

Do you have any experience in Indy markets? 

@Chinmay J.

I was shocked by how high the taxes in the good neighborhoods of Cleveland are. They're almost twice as high as the taxes on my personal residence and it was only built a year and change ago. Not sure how 100 year old, 100k houses can command 3k-5k worth of taxes but it is what it is. I've researched Indy as well and also like their SFR market. Very good job growth and population growth in Indianapolis from what I've seen, but I don't know the neighborhoods as well since I haven't studied Indy as hard yet.

Originally posted by @Bob Okenwa :

@Chinmay J.

I was shocked by how high the taxes in the good neighborhoods of Cleveland are. They're almost twice as high as the taxes on my personal residence and it was only built a year and change ago. Not sure how 100 year old, 100k houses can command 3k-5k worth of taxes but it is what it is. I've researched Indy as well and also like their SFR market. Very good job growth and population growth in Indianapolis from what I've seen, but I don't know the neighborhoods as well since I haven't studied Indy as hard yet.

Agreed. People in Northern VA are complaining about high property taxes, but the property will be worth about $300,000 for it to get a tax bill of about $3000 a yr. Like you said. it is what it is.. Just more handouts to freeloaders is how I see it.. More public services...More waste...

Based on my reading. Indy is definitely a good place to invest for lower tax bill. But the neighborhoods can be tricky. Need to have local, knowledgeable people who know what they are doing. 

Also Franklin County, OH (Columbus and vicinity) seems to be a solid area. OSU, State Capital and lot of business growth in there. Low real estate taxes too compared to some Cleveland and Toledo for sure. 

From what I can see, the taxes in and around the Cleveland market vary substantially not only by county, but also by city within the county. Just worth figuring it all in and if the numbers work, they work. If not, move on.

On the other side of the table, I was at $9200/year in taxes on my personal property with a contract purchase price of $426k...not counting the other assessments because it was a new development or the HOA...and this was Union County (Columbus area)...and that was high in my book.

Originally posted by @Jared Friedman :

Try spartan invest in Birmingham Alabama. Low property taxes, B neighborhoods, quality rehabs, prices range from $80-$120k. I own a few there and so far so good.

 OK Thanks Jared. I will check them out. 

Just read 2 detailed case studies on Spartan Invest in B-ham, AL.. Love their property tax rates...   But looks like Spartan has a waiting list now.  I will reach out to them anyway to see what the real deal is. 

@Chinmay J. Have you looked at Memphis at all? There’s a lot of good providers there. I bought a rental in Cleveland and so far it’s been good, but the taxes are really high.

Also it’s worth noting in Cleveland depending on the area or suburb the taxes can be much higher than other areas. Memphis has lower taxes than Cleveland (im paying about 90 a month for a 75k house) and In some areas it can be even lower

Originally posted by @Caleb Heimsoth :

Chinmay J. Have you looked at Memphis at all? There’s a lot of good providers there. I bought a rental in Cleveland and so far it’s been good, but the taxes are really high.

Also it’s worth noting in Cleveland depending on the area or suburb the taxes can be much higher than other areas. Memphis has lower taxes than Cleveland (im paying about 90 a month for a 75k house) and In some areas it can be even lower

 I passed up on Memphis, TN because I was thinking the property taxes are astronomical.  Doesn't seem to be the case.  Seems like there was gap in my research.. Thanks a lot for bringing this up. I owe you a cold one.. 

@Chinmay J.  well I have a rental in both places and my taxes are almost the same dollar wise but the property Worth is nearly double in Memphis which tells you the taxes are lower then Cleveland 

Originally posted by @Chinmay J. :
Originally posted by @Caleb Heimsoth:

Chinmay J. Have you looked at Memphis at all? There’s a lot of good providers there. I bought a rental in Cleveland and so far it’s been good, but the taxes are really high.

Also it’s worth noting in Cleveland depending on the area or suburb the taxes can be much higher than other areas. Memphis has lower taxes than Cleveland (im paying about 90 a month for a 75k house) and In some areas it can be even lower

 I passed up on Memphis, TN because I was thinking the property taxes are astronomical.  Doesn't seem to be the case.  Seems like there was gap in my research.. Thanks a lot for bringing this up. I owe you a cold one.. 

 J>  there is dual tax in Memphis if you buy in the city limits of Memphis.. so be sure to check.. if you buy in the county then its only one tax.

in my experience in Cleveland ( which granted is only about a year now) tax's vary quite a bit between community and suburb..

KC  Indy  Northwest Indiana  parts of MS  GA AL are all pretty comparable in property taxs  but I would say that is one component.. if the purchase price to rents still work.. and you really like your team .. and or the particular asset.. then if it works it works I would not let property tax's be the ultimate driver... Although with the Caveat that in Texas with their non owner occ tax's and soil conditions one needs to be pretty cautious there.. TAx's when you buy are generally not anywhere will they will land once you close and they reassess.. at least that is what I have found out on our stuff .. I like Texas or Texans  not so much for others.. unless you are getting one heck of a buy..

@Chinmay J. I see the extreme need for TK properties. One of our goals for 2018 is to  provide more deals for fix and flip investors (that need to be rehabbed)  and for OOS investors that are fully TK. We have been raising capital, adding more lines of credit, and looking into the county sheriff's sale for deals. Hoping to pick three up this Tuesday...

Anyways, I know you are looking for TK. But I wanted to share the numbers on a property I sold a friend of mine. He bought for 40, put 50 into it, taxes are 2k annually, and it rents for $1300/ month. This is in Middlefield Village located in Geauga County Ohio, not far from Cleveland suburbs which are Cuyahoga County. My goal is to be able to find more properties such as this and fill that gap. Merry Christmas to all!

Originally posted by @Jay Hinrichs :
Originally posted by @Chinmay J.:
Originally posted by @Caleb Heimsoth:

Chinmay J. Have you looked at Memphis at all? There’s a lot of good providers there. I bought a rental in Cleveland and so far it’s been good, but the taxes are really high.

Also it’s worth noting in Cleveland depending on the area or suburb the taxes can be much higher than other areas. Memphis has lower taxes than Cleveland (im paying about 90 a month for a 75k house) and In some areas it can be even lower

 I passed up on Memphis, TN because I was thinking the property taxes are astronomical.  Doesn't seem to be the case.  Seems like there was gap in my research.. Thanks a lot for bringing this up. I owe you a cold one.. 

 J>  there is dual tax in Memphis if you buy in the city limits of Memphis.. so be sure to check.. if you buy in the county then its only one tax.

in my experience in Cleveland ( which granted is only about a year now) tax's vary quite a bit between community and suburb..

KC  Indy  Northwest Indiana  parts of MS  GA AL are all pretty comparable in property taxs  but I would say that is one component.. if the purchase price to rents still work.. and you really like your team .. and or the particular asset.. then if it works it works I would not let property tax's be the ultimate driver... Although with the Caveat that in Texas with their non owner occ tax's and soil conditions one needs to be pretty cautious there.. TAx's when you buy are generally not anywhere will they will land once you close and they reassess.. at least that is what I have found out on our stuff .. I like Texas or Texans  not so much for others.. unless you are getting one heck of a buy..

Thanks Jay... I think I had read one of your posts about double taxation in Memphis area, and was basing my conclusion off that.  Thanks for pointing out the distinction on county vs city limit.  Even then it might beat what Cleveland has. lol

I agree with you that it is one part of the equation, but it's such a constant. You can always find a better team to work with, but a great team can't change the tax structure. 

Originally posted by @Caleb Heimsoth :

Chinmay J. My city and county taxes in Memphis are less then my county taxes in Cleveland based on property value

 That's great ! Are you using Chris Clothier and his team (Memphis Invest) or someone else as your TK provider. 

Originally posted by @Chinmay J. :
Originally posted by @Bob Okenwa:

@Chinmay J.

I find myself in the same boat as you (especially with Cleveland properties and the high taxes) so I'd be interested to see what kind of posts come through on the board for this one.

I also looked up Toledo Ohio, where Ohio CashFlow run by  Engelo Rumora operates, and the taxes there are no better. For about $100,000 I'd be paying more than $3K in taxes. I beleive Lucas County residents get some credits for primary residence and owner occupied etc, but we as investors wont' be getting none of that. 

I just pulled up a random property on Realtor in Toledo, OH and looked up their tax bill. I crapped in my pants. 

Do you have any experience in Indy markets? 

Thanks for the mention Chinmay,

Much success with your endeavors.

ps. I suggest Calvin Klein briefs for easiest stain removal. Make sure they are the "Steel" model tho hehe lol

@Chinmay J. You are right about Indy - you have to be careful about neighborhoods, but there is certainly a lot of excitement there for investors, and many old neighborhoods have been, are, or may be expected to rise soon.  Indy is very competitive now, and it can be hard to find a good turnkey provider with inventory and deals. Kansas City has some of the best property tax rates I've seen for the cash flowing markets, and I think is easier to get good TK deals right now.   And like Jay mentioned NW Indiana is also a lower property tax market, and part of the Chicago metro area. It also has much more favorable laws for landlords than the other side of the state border as well.

No matter which market you end up targeting, be sure to thoroughly vet the teams you are considering working with, including a visit.

Kansas City is a good market for you to do some further research. In my opinion (which is a little biased since I live here) KC should be at the top of your list.  The numbers and economy are what you are looking for Feel free to reach out if you have any questions. 

@Larry Fried - Absolutely I will be vetting the team I'd be working with including visit. I want to invest in B neighborhoods (as the thread suggests)

@Nick McKinnis - Yes, KC also is indeed a great place to invest.  Plus I can come watch Royals play (lol).  Are you biased towards KC, MO or KC, KS.   Are the tenant-landlord laws comparable?

I am biased towards KC, MO. I would they are comparable. However in MO to run a management company you have to be a licensed broker, so you are a little more likely to have a PM that knows more.

@Chinmay J. It’s also worth mentioning that Memphis has a different tax rate for multifamily (less than 4 units or commercial) then it does single family.

This means if you just buy a duplex it’s taxed higher then a single family. Multifamily is harder to make work in Memphis compared to some other markets, so bear that in mind to


I dont get the turnkey concept because numbers never works. you are paying almost market value or sometime more than market value. you want to build the equity as a real estate investor.If you really want to invest passively than REIT or online platform makes more sense.I have analyzed and still analyzed tunkey property but none of them makes any sense to me.

Originally posted by @Chinmay J. :

So recently I have taken interest in expanding OOS. I live in Loudoun County, VA and OOS deals, if done properly can provide lucrative returns. Also TK model allows me to invest even by keeping my full time employment.

So far I am nothing but somewhat disappointed in finding someone reputable company to connect with that can make the numbers work.  Found real good company in Cleveland, OH in Smartland, and thanks to @Tom Ott for reaching out to me and following through like he said he would, but the property taxes in Cuyahoga county seem astronomical, with no added value for me, as an investor.   I am a little hesitant to pull trigger on Cleveland properties due to that.  The property worth $90,000 is being taxed around $2,400, a whooping 2.66% real estate tax.  Places like Columbus,OH. Indianapolis, IN, Jacksonville,FL  all seem to have around 1 to 1.5% tax. 

So my recent experience with "reputable" providers is that they seem too busy to take new clients. Had a brief conversation with a very well renowned TK Provider in Indy, and was informed by one of their associates over IM (chat) that they are currently NOT taking new clients. I emailed this husband/wife team anyway to find out from husband that they are taking new clients (that was after my 2nd email), and the husband asked me to propose a time in the afternoon, which I promptly did.  Never heard a word back from the guy again ! Sent him another email a few days later... NOTHING !!.. What gives !    Some people pride themselves to be Full Service (FS).. That's hardly any service.. Just sayin'... 

After the horror stories, not even going to reach out to people like Morris Invest. I remember this dude from Fox News (Fox and Friends Weekend). Now did he become real estate guru after quitting FOX NEWS or was he first a real estate guy then became a media personality? He is charismatic and all, but he ain't no Tom Brady. Sorry I digress. 

Right market for me would be a place with strong job market, lower tax bill and low crime with rent around $850 - $1000

Right company for me would would following characteristics. 

  • Efficient communication and prompt email responses. Should always be reachable.  I am the kind of guy who never takes advantage of anyone. If you respect my time, I will respect your's 10x 
  • Should own the property. No middle men brokers sending MLS listings.
  • Should have In House PM. 
  • Properties should be in B neighborhood with price point of $80,000- $90,000
  • Should be willing to take me to the property. I plan to fly down once I am done researching and ready to pull the trigger. 
  • Should have good reputation in the industry with verifiable 3rd party references.

If any investors have any recommendations, please post or PM me privately.. Both work. 

as far as taxes are a concern if you buy it right you can go back and appeal for adjustment of the taxes.I have done for most of my rentals.  but you can not do it for the turnkey of course.

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