Long Beach, CA · Member since 2017 · 11 posts · 3 votes
Hello, BP. I have been a member for a little over a month. Other than owning my own home I am new to real estate investing. I have been reading blogs, forums and ebooks since in joined. I have learned a few things but I know there is a ton of other things to learn. My reasons for investing are to supplement my future retirement and equally important to be able to leave something for my children. I am a little wary of investing at home due to prices being so high in SoCal area. I was looking in to turnkeys OOS as I have a W2 and don't have time to constantly look for deals. I plan to buy and hold so they look appealing. I worry though about vetting everything from the company to the neighborhood. Any thoughts?
Rental Property Investor · N. CA · Member since 2015 · 32 posts · 23 votes
8y
Welcome to BP Eric!!
I suggest you take a look at the following website:
http://turnkey-reviews.com/
It's a website created by Brie Schmidt and Jay Hinrichs . It's basically the Yelp for TK providers with investors giving real feedback on TK providers nationwide. Brie also does a podcast interviewing investors who use TK operators. Some good lessons learned. It's a good place to start.
Wishing you the best!
Metra
Rental Property Investor · N. CA · Member since 2015 · 32 posts · 23 votes
8y
Welcome to BP Eric!!
I suggest you take a look at the following website:
http://turnkey-reviews.com/
It's a website created by Brie Schmidt and Jay Hinrichs . It's basically the Yelp for TK providers with investors giving real feedback on TK providers nationwide. Brie also does a podcast interviewing investors who use TK operators. Some good lessons learned. It's a good place to start.
Wishing you the best!
Metra
I suggest you take a look at the following website:
http://turnkey-reviews.com/
It's a website created by Brie Schmidt and Jay Hinrichs . It's basically the Yelp for TK providers with investors giving real feedback on TK providers nationwide. Brie also does a podcast interviewing investors who use TK operators. Some good lessons learned. It's a good place to start.
Rental Property Investor · Seymour, IN · Member since 2017 · 34 posts · 21 votes
8y
Eric-
Congrats on both getting into real estate investing and finding BP! I'm in the Indy market and I just might have a few things you'd be interested in. If not and at worst, I can help give you a snapshot of the current market. Hit me up anytime!
BH
Hello, BP. I have been a member for a little over a month. Other than owning my own home I am new to real estate investing. I have been reading blogs, forums and ebooks since in joined. I have learned a few things but I know there is a ton of other things to learn. My reasons for investing are to supplement my future retirement and equally important to be able to leave something for my children. I am a little wary of investing at home due to prices being so high in SoCal area. I was looking in to turnkeys OOS as I have a W2 and don't have time to constantly look for deals. I plan to buy and hold so they look appealing. I worry though about vetting everything from the company to the neighborhood. Any thoughts?
Eric
RESEARCH! That is the best way to go. Find out all you can about a company and where it operates. You do not want someone trying to dress up a bad home in a bad location. Also, make sure it is a TRUE turnkey and not someone just using it in name. They should, own, renovate, and manage the property all in house and not use third parties. Sometimes agents use it to describe a home they think looks good on the MLS, that is NOT a Turnkey.
As you dive in, I would suggest looking at the following:
Congrats on both getting into real estate investing and finding BP! I'm in the Indy market and I just might have a few things you'd be interested in. If not and at worst, I can help give you a snapshot of the current market. Hit me up anytime!
Long Beach, CA · Member since 2017 · 11 posts · 3 votes
8y
I hope it is not too late for this post. One last question. Besides having boots on ground what is the best way to determine A, B, or properties? Any good sites to use?
Real Estate Broker · Bradenton, FL · Member since 2017 · 544 posts · 363 votes
8y
@Eric Martin Welcome to BP! I don't think I would invest OOS without serious "boots on the ground." I have found that ranking neighborhoods or zip codes by (median rent / median price) give's a pretty accurate picture of a/b/c/d. That will give you a reference point for prices and rents that allows you to compare areas within a city. At least this works well in Birmingham. You can find this info on zillow or get an agent to pull it for you.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Schools can also help determine the neighborhood. I didn't use a TK serivce and found my own house, it did take a LOT of time and effort.
However, for me to trust the TK company numbers I'd have to do similar amount of work for my due diligence. This kind of defeats the value of the TK for me.
If you're looking for easy, low involvement, and high returns you're going to increase your chances of making a bad investment. If you don't do due diligence or research where you're investing you can't get mad that the marketing numbers might of been more generous than real life numbers...
Schools can also help determine the neighborhood. I didn't use a TK serivce and found my own house, it did take a LOT of time and effort.
However, for me to trust the TK company numbers I'd have to do similar amount of work for my due diligence. This kind of defeats the value of the TK for me.
If you're looking for easy, low involvement, and high returns you're going to increase your chances of making a bad investment. If you don't do due diligence or research where you're investing you can't get mad that the marketing numbers might of been more generous than real life numbers...
I get it. I should be involved in the project from the start and not depend solely on the Tk.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
8y
Hey Eric. I'm up in Venice and have always done OOS turnkeys. There's definitely some things to learn about them to make sure you know what you're getting and getting into, and learning how to make sure they continue to run (which is no different for regular rental properties, tho), but on the scale of things, you can certainly spend significantly less time on them than with other avenues of REI. I've learned some lessons with mine over the 6 years I've owned them, and I've been working with people buying turnkeys for just as long as I've been around for their experiences as well, and anything in REI can continue to force learning experiences, but mine have been great and I would buy more for sure. Reach out anytime if I can be of any help!
Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
8y
@Eric Martin - there are no shortcuts in this game. Do you homework, I can't stress this enough. First, figure out which market you want to be in. Second, research the heck out of the area and narrow it down to one region. Third, then figure out what neighborhoods you want to be in. Real estate is local. You can't skip these steps. Don't trust a turnkey to tell you where to invest and what is a good deal.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
I’ve bought turnkey and bought one finding it myself. I invest in Memphis and Cleveland markets, both of which have a lot of info here on BP, which id recommend reading.
Both ways have pros and cons and neither way is correct. Your return will probably be higher if you do it yourself but there’s also something To be said about owning property that you rarely have to be concerned with (TK), assuming it’s a reputable provider.
Feel free to PM me if you want to discuss it more.
@Eric Martin - there are no shortcuts in this game. Do you homework, I can't stress this enough. First, figure out which market you want to be in. Second, research the heck out of the area and narrow it down to one region. Third, then figure out what neighborhoods you want to be in. Real estate is local. You can't skip these steps. Don't trust a turnkey to tell you where to invest and what is a good deal.
Rental Property Investor · Mansfield, OH · Member since 2017 · 151 posts · 117 votes
8y
@Eric Martin - I've been in the same situation. With a full time job I bought local but got to the point where I couldn't do any more working at the same time. Ended up going Turnkey in Indianapolis and over the past 5 years have purchased 8 with great results. Here's four things to look for when researching a market:
1- Population over a million and good growth rate. This ensures that there are plenty of available houses (with an approximate 3% foreclosure rate, there are about 3000 houses at auction each month), renters to choose from and that the city is growing rather than stagnate or losing population. Good markets didn't drop during the 2008 crash...
2- Cheap Houses. Make sure you get at least the 1% rule meaning $1000 of rent for each $100k of purchase. This should also ensure youre getting about 8% return on your money.
3- Business Friendly and Credit worthy State. Look at how easy it is to set up an LLC, the costs of maintaining the business and the cost and timing of evicting a tenant. Also look for states and cities that have a good credit rating which ensures that they will be pouring money into revitalization which increases jobs, growth, appreciation and rents.
Hello, BP. I have been a member for a little over a month. Other than owning my own home I am new to real estate investing. I have been reading blogs, forums and ebooks since in joined. I have learned a few things but I know there is a ton of other things to learn. My reasons for investing are to supplement my future retirement and equally important to be able to leave something for my children. I am a little wary of investing at home due to prices being so high in SoCal area. I was looking in to turnkeys OOS as I have a W2 and don't have time to constantly look for deals. I plan to buy and hold so they look appealing. I worry though about vetting everything from the company to the neighborhood. Any thoughts?
Eric
You can never eliminate risk but you can mitigate it. To mitigate your risk investing out of state I recommend doing the following.
1. Invest in nicer assets in higher quality neighborhoods. The low end properties will have more periods of really great performance but it's going to come with a lot more periods of poor performance.
2. Make sure the company you buy from is a licensed Real Estate Brokerage.
3. Make sure your property managment company is a licensed Real Estate Brokerage.
4. Get a 3rd party inspection contingency on every home you buy.
5. Use a residential mortgage. Not only do you stretch your funds 4x further you get a Bank appraisal. This ensures you dont drastically overpay for the property.
@Eric Martin - I've been in the same situation. With a full time job I bought local but got to the point where I couldn't do any more working at the same time. Ended up going Turnkey in Indianapolis and over the past 5 years have purchased 8 with great results. Here's four things to look for when researching a market:
1- Population over a million and good growth rate. This ensures that there are plenty of available houses (with an approximate 3% foreclosure rate, there are about 3000 houses at auction each month), renters to choose from and that the city is growing rather than stagnate or losing population. Good markets didn't drop during the 2008 crash...
2- Cheap Houses. Make sure you get at least the 1% rule meaning $1000 of rent for each $100k of purchase. This should also ensure youre getting about 8% return on your money.
3- Business Friendly and Credit worthy State. Look at how easy it is to set up an LLC, the costs of maintaining the business and the cost and timing of evicting a tenant. Also look for states and cities that have a good credit rating which ensures that they will be pouring money into revitalization which increases jobs, growth, appreciation and rents.
Johnston, IA · Member since 2016 · 129 posts · 50 votes
8y
Welcome to BP! I started investing about 1 1/2 years ago and am SO GLAD I did. I researched and researched before ever purchasing my first deal, and since then, I have not stopped educating myself. In order to diversity myself, I have purchased from multiple wholesales, have multiple PMs, and have refied my properties with a couple different lenders. I love to help others learn how to make it work! Feel free to DM me and I'll pass on what I've learned.