$50K to invest, looking for Turn-Key recommendations.

Los Angeles, CA · Member since 2016 · 16 posts · 5 votes

Hi BP!

When it comes to turn-key investing, I'm aware it's generally frowned upon, because it eats up so much of ones potential income.

That being said, I'm currently in a position where I have very little free-time, unfortunately, to put into real estate investing.

However, I don't want my lack of time to force me to sit on the side lines until more of my schedule is freed up.

I'm willing to have lower returns if it means lower risk, lower time-commitment, and less headache — so, it seems turn-key is the way to go.

I have about $50K cash to invest, and am wondering if anybody has turn-key investing experience, and if there are any companies they could recommend?

Thank you!

Best,

Spencer

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Holly Williams

Rental Property Investor · New York City · Member since 2014 · 208 posts · 271 votes

I second the research syndication route, especially if you are an accredited investor. You do indeed have to vet the syndicator, and ask the right questions, but it's a very good way for truly passive income and tax benefits.

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Shane Willis
Member since 2019 · 31 posts · 12 votes
7y
You may want to research syndication. Syndication may accomplish what you looking for, just be careful who the managing partner is. Cheers
1 Reply
Holly Williams
Rental Property Investor · New York City · Member since 2014 · 208 posts · 271 votes
7y
I second the research syndication route, especially if you are an accredited investor. You do indeed have to vet the syndicator, and ask the right questions, but it's a very good way for truly passive income and tax benefits.
2 Reply
Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
7y
Originally posted by @Account Closed:

Hi BP!
When it comes to turn-key investing, I'm aware it's generally frowned upon, because it eats up so much of ones potential income.
That being said, I'm currently in a position where I have very little free-time, unfortunately, to put into real estate investing.
However, I don't want my lack of time to force me to sit on the side lines until more of my schedule is freed up.
I'm willing to have lower returns if it means lower risk, lower time-commitment, and less headache — so, it seems turn-key is the way to go.
I have about $50K cash to invest, and am wondering if anybody has turn-key investing experience, and if there are any companies they could recommend?
Thank you!
Best,
Spencer
An Equity fund or Turnkey can be a great way to invest in a "hands-off" way. Turnkeys are great when you work 9-5 and do not have time to be a landlord.
Try looking at:
5 Things to Consider When Choosing a Turnkey Rental Property Location
How to Find the Right Turnkey Real Estate Investment Company for You
and
What to Ask When Working With a Turnkey Provider
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Account Closed
Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
7y
Originally posted by @Account Closed:

Hi BP!
When it comes to turn-key investing, I'm aware it's generally frowned upon, because it eats up so much of ones potential income.
That being said, I'm currently in a position where I have very little free-time, unfortunately, to put into real estate investing.
However, I don't want my lack of time to force me to sit on the side lines until more of my schedule is freed up.
I'm willing to have lower returns if it means lower risk, lower time-commitment, and less headache — so, it seems turn-key is the way to go.
I have about $50K cash to invest, and am wondering if anybody has turn-key investing experience, and if there are any companies they could recommend?
Thank you!
Best,
Spencer
You probably want to compare ROI, CoC, ease of maintenance, location, etc before deciding. I did a spreadsheet to make some of those comparisons and here is how it turned out:
Average Turnkey Cash Flow Per Door In Phoenix Metro Area
https://www.biggerpockets.com/forums/600/topics/584916-average-cash-flow-per-door-in-phoenix-metro-area
1 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
7y
@Account Closed I have bought from turnkey companies and can say there are other more passive ways to invest in REI, which I discuss in my BP blog article Three Key Routes for Passive Real Estate Investing
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
if your talking a turn key rental all in for cash at 50k thats a Morris house and like 90% of Morris buyers you will promptly lose 70 to 90% of your investment as a 50k all in home is in the hood .. unless your buying some little mid western town that has no demand.. crime is low but houses are tough to keep rented and are basically not worth much.
there are crowd funding sites that you dont need to be accredited and you can play around with small investments to see how they work.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
7y
Three people I would research:
Marco Santarelli of Norada Real Estate
Chris Clothier of Midsouth Home Buyers
Ali Boone of Hipster Investments
All are thought leaders and high performers in the turnkey real estate space. I have not done business with any of them, but they seem to have some of the best reputations I've seen. There are surely others, but those are the first 3 that come to mind for me.
Additionally: Syndicator and passive syndication investor here. As others have said, syndication may be an option for you.
1 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
7y
@Taylor L. Chris Clothier is with Memphis Invest, not Midsouth.
1 Reply
Melissa Nash
Rental Property Investor · Orange County, CA · Member since 2016 · 740 posts · 529 votes
7y
@Spencer Wardwell turn key is a fantastic way for the passive investor to get in the game- And take advantage of all of the write-offs you get from the property itself. Real estate deductions from my properties saved me on my taxes this year and my CPA told me that I need to buy more properties so that I can continue these deductions. Marco’s podcast is “passive real estate investing” It is one of the top iTunes best ranked investment podcasts And full of fantastic information. I’d start there for sure.
1 Reply
David Miller
Developer · Magnolia, DE · Member since 2017 · 75 posts · 28 votes
7y
@Spencer Wardwell I notice you’re in California. $50k doesn’t go that far there. If you do the syndication route you are looking at 8-11% which isn’t terrible. There are two other ways which may be just as safe and generate more return for your money. You can contact a reputable hard money lender and invest with them and get 12% or find a small developer who needs some money to flip a house or develop some land, this may be a little more difficult if you don’t have any experience in RE Development. If you need a hard money guy I know a guy in California that used to loan me money. Not sure if he is taking on more money at the moment. Best of luck
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Junior Soares
Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
7y
@Spencer Wardwell You may want to consider REITS, or P2P etc. If time is not on your side, you will have solid returns on your 50k. Not sure how less risky turn key is. Just look up Morris Invest Thread on here and Google turnkey fraud. Been happening for decades. You just might be safer buying off of Zillow with tons of pictures. But everyone has their own opinions. 50k is alot of money, to me at least.
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Rob Hoffman
Oakland, CA · Member since 2016 · 104 posts · 47 votes
7y
Originally posted by @Taylor L.:

Three people I would research:
Marco Santarelli of Norada Real Estate
Chris Clothier of Midsouth Home Buyers
Ali Boone of Hipster Investments
All are thought leaders and high performers in the turnkey real estate space. I have not done business with any of them, but they seem to have some of the best reputations I've seen. There are surely others, but those are the first 3 that come to mind for me.
I'll be releasing podcast interviews with Marco Santarelli and another with a friend of mine who is a passive turnkey investor in his late 20s with 13 doors. If you're interested in hearing those when they come out, shoot me a connect and I'll hook you up.
Additionally: Syndicator and passive syndication investor here. As others have said, syndication may be an option for you.
Chris Clothier is actually with Memphis invest. Midsouth is ran by Terry Kerr.
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Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
7y
@Account Closed I would get a turnkey. That's how I started. Syndication as a LP requires a lot of money. Unless you have a net worth of over 250K you should not even think about being a LP.
1 Reply
Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
7y
Originally posted by @Larry Fried:

@Taylor L. Chris Clothier is with Memphis Invest, not Midsouth.
Whoops!! I my bad. I saw him speak & met him at the first Best Ever Conference. Remembered the man more than the company!
0 Reply
Alina Trigub
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
@Account Closed
You have a ton of great recommendations here. What is comes down to is your personal preference. To help you with researching the syndications, here're a few posts that will get you started:
https://www.biggerpockets.com/member-blogs/10850/7...
https://www.biggerpockets.com/member-blogs/10850/7...
ttps://www.biggerpockets.com/member-blogs/10850/8...
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Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
7y
You want to pay 50,000 cash or want to get a turnkey leveraged up to 200,000?
Two very different things
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Account Closed
Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
7y
Originally posted by @Account Closed:

Hi BP!
When it comes to turn-key investing, I'm aware it's generally frowned upon, because it eats up so much of ones potential income.
That being said, I'm currently in a position where I have very little free-time, unfortunately, to put into real estate investing.
However, I don't want my lack of time to force me to sit on the side lines until more of my schedule is freed up.
I'm willing to have lower returns if it means lower risk, lower time-commitment, and less headache — so, it seems turn-key is the way to go.
I have about $50K cash to invest, and am wondering if anybody has turn-key investing experience, and if there are any companies they could recommend?
Thank you!
Best,
Spencer
There has been much scandal in the turnkey space, and some very public and sizable stuff is going public now with Morris Invest - still early and everything is getting sorted out so, everything at this point is alleged.
That said, I think turnkey is a great idea for certain people, but the challenge is getting a good provider. The challenge with getting a good provider, is often people will give you advice on a bad provider!!! The other challenge may be, you might be your own worst enemy.
I would place you in the high-risk, easy mark category, so watch yourself my friend. The things you have said will get the scammers knocking.
You said, "I do not have the time to spend in RE" "But I don't want to sit on the sidelines" "I have $50k to invest"
Finding the right provider might take some time. It's not just the buy, it's the management too.
Jay is right. $50k can buy a property in the mid-west hood, barely. I might suggest you expect to pay at least $75k per unit. And for that price, in the right area, you should also expect to get a unit in very-good or rehabbed shape, that ought to be mostly maintenance free for a long time. The ones going for $25k all need $25k to $50k in cap-ex out of the gate, unless being a slumlord is your thing, or have a knack for discounted property, which you don't. Appreciation is a trickier game, and even the most savvy run a high risk. Buy and hold cash flow is steady in many places.
Happy researching!
1 Reply
Ben Dao
Rental Property Investor · Saint Louis, MO · Member since 2016 · 123 posts · 84 votes
7y
I think turnkey is a good option, especially if you are from California. I am from CA and now live in St. Louis. I buy $50k homes as my business model. Yes, they are in more lower income areas. But I have learned how to manage and deal with the people and the area. You would not have to worry about that part being out of state. You might not get a lot of appreciation, but you can have cash flow on a free and clear asset. I like that. Most of my rentals usually rent for around $750-800 a month . Most turnkey providers will be in the Midwest. There are also some in the south and east coast.
But it is all about the property management. How do you know which one is good? The best place to start is referrals, but it does come down to trial and error. Good Luck!
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
7y
Moderator Note: Self promotion is NOT allowed in the forums.
[email protected]Podcast Guest on Show #261
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Jevonte Lockhart
Ogden, UT · Member since 2017 · 8 posts · 2 votes
7y
@Spencer Wardwell check out @Antoine Martel , From what I have seen, I'm impressed and its looks like him and his team run a solid business. I have not personally done business with them nor have I done a turnkey transaction, but they seem like a solid group of people trying to help people get into real estate.
The website is https://martelturnkey.com
Check em out. Don't be afraid to ask question either.
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Nathan Brooks
Real Estate Investor · Kansas City, MO · Member since 2012 · 397 posts · 187 votes
7y
Great question @Account Closed. There are several really great companies out there ... love to help however we can sir!
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Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
7y
@Account Closed It's not so much income that people will say turn key eats up but equity and it's true that you probably won't have any built in equity at the start. As you're finding out though, it's not only hard to do everything yourself from out of state, it's also very risky. Turn key is a good way for an inexperienced investor who doesn't have a lot of time to invest in good markets because they are not constrained by where they live. They key is working with the right company as there are some very good ones and some bad ones just like in any business. With $50K to invest, I would recommend that you finance so that you can buy a higher class of asset. Anything in that price range is generally going to be in a rough area.
In general, the ones to avoid are the ones that:
- Don't allow financing or a finance contingency (it can be a good indication they are selling above market value)
- Don't allow for your own independent property inspection
- Are not realistic with their pro forma's (i.e. they don't include vacancy or maintenance projections or use unrealistically low vacancy factors)
- Require you to pay for any renovation upfront
- Sell only in cheap. low end neighborhoods
- Don't accurately represent the neighborhood/property classification
- Don't have consistent rehab standards for all properties
- Don't provide a scope of work for the property
- Can't provide references of repeat investors
- Require you to close before a tenant is in place
If Indianapolis or Kansas City are on your radar, I may be able to help.
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Kiera Underwood
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
7y
There are teams that help out of state investors on a turnkey level, but that offer inventory that isn't turnkey. So you're getting a better equity position than turnkey and you've got a property that's cash flowing, it's just not been fully rehabbed.
Better equity doesn't mean 20% equity you ambitious sharks! But in OKC I've seen low to 5% built in equity and cash flowing properties go out of state investors consistently.
What markets are you looking at?
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Kiera Underwood
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
7y
Also in OKC you could grab 2 b class properties or maybe even 3 C class properties with 50k. That's cash flow of $600 a month right off the bat!
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Alyssa Dyer
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
7y
@Account Closed when you start vetting providers, just ask to talk to some people they've worked with. Ask to connect with a couple where deals didn't go as planned. If they're doing a good job they shouldn't be afraid to show you where there were hiccups and how they corrected.
What markets are you interested in?
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