Just starting out in REI

11 Replies

I’m just starting out in rei, I like the idea of turnkey for my first couple of rentals and then getting into buying cheap and rehabing them and then renting. I’m just looking for any guidance, or advice anyone might have. Thank you!

I think that's a perfect reason to start with turnkey-- to learn the basics and the fundamentals so you can later do more advanced stuff and have a better chance at excelling with it. 

So much so, I wrote an article about it!

https://www.biggerpockets.com/renewsblog/turnkeys-...

Where do you live now? And what's your budget for a turnkey? Lots of opportunities but all with varying price points.

That is a great way to start Jonathan. I started that way and Ali sent you the article that she wrote about it. It will allow you to learn more while you are also owning a property and generating cash flow. That markets have you looked at? 

I will tell you this much--if you're going to BRRRR, you better have a good contractor that knows what they're doing by your side. There is so much that goes into rehabbing a property that these ridiculous tv shows don't tell you at all. Just understand that something WILL go wrong with just about every property lol. If you're able to weather the stupid stuff that happens, you'll make it. Prepare yourself for a rollercoaster ride my friend. In the end, it's SO worth it though.

@Ali Boone I live in northeast Arkansas. There’s a small market here. My cap is 40k. But I could go a little higher if the return is worth it. I have a family of 8! Me and my wife and our 6 kids. I ultimately want to get into rei because I’m tired of not being able to do anything with my kids. I don’t want them to just go to school and come home and do nothing else, I want to be able to provide a great childhood for them.
Originally posted by @Jonathan Ahle :
@Ali Boone I live in northeast Arkansas. There’s a small market here. My cap is 40k. But I could go a little higher if the return is worth it. I have a family of 8! Me and my wife and our 6 kids. I ultimately want to get into rei because I’m tired of not being able to do anything with my kids. I don’t want them to just go to school and come home and do nothing else, I want to be able to provide a great childhood for them.

8! Wowza!

Originally posted by @Jonathan Ahle :
I’m just starting out in rei, I like the idea of turnkey for my first couple of rentals and then getting into buying cheap and rehabing them and then renting. I’m just looking for any guidance, or advice anyone might have. Thank you!

 Welcome to the site Jonathan Ahle.

Turnkey can be a great option. Or it can be a horrible option if it's done wrong. Now don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state nor is your success really dependent on which out of state market you choose. It becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

That is an excellent decision to start with Turnkey properties. Make sure you follow up with the company on each and every step so that you can be informed and also learn stuff about rehabbing

Good luck,

Tim

@James Wise thanks for the input! I don’t think I’m going to invest out of state just yet. I’m looking at properties close to home for now. I think this will give a little better feel for the process and allow me to safely get my feet wet. I’m only looking at 3 br and up at the moment, I figure anything less than 3 beds won’t have a good enough ROI.
Originally posted by @Jonathan Ahle :
@James Wise thanks for the input! I don’t think I’m going to invest out of state just yet. I’m looking at properties close to home for now. I think this will give a little better feel for the process and allow me to safely get my feet wet. I’m only looking at 3 br and up at the moment, I figure anything less than 3 beds won’t have a good enough ROI.

 If you are renting out single family houses I recommend a 3/1. Simple & easy. If you are going multi-family a nice duplex with two 2/1's in it is a great cash cow.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you