First Rental Property (Turnkey)

[Joseph Wahl]

Hello everyone, I'm looking to make my entrance into the real estate market this winter. I currently have a little over $70,000 set aside to purchase a rental property in cash. I am graduating college next year, so I want to have at least a few rental properties in my portfolio. While I have done my research over the past 6 months or so, I do not feel confident in going out, identifying a market, and purchasing and fixing up a property to rent out myself, even though I plan to use a property manager when it comes to dealing with tenants. I have been looking into turnkey companies so that I can learn the process for my first property. I understand these companies charge a premium for their services. However, for every company I find that looks decent, I end up uncovering some scalding reviews that make me uneasy to make a purchase with that company. I was hoping that any of you with experience with turnkey companies could recommend a reputable company that I can use. I am located in southeastern PA, but I don't care where the property or company is. I would like to stay within an 80k budget, and my goal is cash flow, not appreciation. Thank you all in advance!

[Mike D'Arrigo]

@Joseph Wahl I have to commend you on your desire to get in to real estate at a young age. Personally, I would recommend starting by defining very specific criteria and ROI goals and then selecting a market that will give you the best change of achieving those goals, then seek out the best turn key companies in that market. Although you mention scathing reviews, there are many good turn key companies right here on BP so don't feel it's impossible to find a good one. Just do your due diligence.

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