Is Turnkey Real Estate Dead?

Question

If you are an out of state investor who is buying turnkey properties from a traditional turnkey provider, you are probably leaving money on the table. There is a way to make more money with long distance rental properties. During the 1,558th episode of The MLS Search & Analysis Show, turnkey investing expert James Wise is showing out of state investors how they can make even more money buying properties using a real estate investment strategy that's a little bit different than the pure turnkey real estate investing strategy. James Wise does all of this while going over the numbers on a real rental property in Lorain, Ohio.

CLICK HERE to watch the show

Is Turnkey Real Estate Dead? | MLS Search & Analysis 1,558 - 1949 E 30

CLICK HERE to watch the show

Is Turnkey Real Estate Dead? | MLS Search & Analysis 1,558 - 1949 E 30

Jacob Sherman · Answer

Hey James ! My name is Jacob with Lendbright and we are a national lender specializing in bridge, fix and flip, ground up construction and DSCR loans . We are able to assist you and your buyers with no income no doc financing welcoming first time investors ! What are some of the scenarios looking like ? I can be reached at 267-516-0896 jsherman@lendbright.com

Todd Crippen · Answer

@James Wise I agree that has evolved a bit, but think the more accurate description would be that it is just a little more challenging to find solid turnkey deals. That being said, it's all about hitting benchmarks. If you are still seeing those benchmark return figures after debt service, then it is still viable and lucrative. Investors just have to spend more time focusing on markets that still have the capability of hitting those benchmarks. Example: Investors usual expectations during initial analysis: a cash on cash return of 8-12%; cap rate of 6-10%; GRM of .85-1%; and of course positive cash flow after debt service.

In Kansas City, we are still seeing these numbers, even witht the higher interest rates. For example, I just picked up a property with the following return figures: Cash on Cash of 10.16%; Cap Rate of 8.89%; and a GRM of 1.01%. These are all very solid and is a great investment.

Additionally, a lot of economists and real estate pros are projecting another surge in market value after the rates are lowered (estimated that the first reduction will be in July of 24) because of the squeeze of inventory. Once we see the rates reflect low 6's and high 5's, there is a good reason to believe that investors that had the opportunity to purchase property, hitting their investment benchmarks during the higher interest rates, will experience a solid increase in equity with the increase in market values.

I will also end on the fact that a lot of lenders are offering promotional incentives right now because of the reduction in opportunities. I have spoken to many lenders in my network that are offering investors refinancing options after the rates are reduced without any closing costs.

I agree that it may be a little more difficult to find these great deals, but finding a good team with boots on the ground in markets like Kansas City will still provide great opportunities.

James Wise · Answer

Jacob,

Sounds interesting. For us to refer you to our clients as a potential source of financing, you'll need to sponsor the show. Follow this link to do so.

https://www.holtonwisepropertygroup.com/advertise-with-us/