Updated over 6 years ago on . Most recent reply
Rental properties: Turnkey vs Find on your own
What are the experienced professionals opinion on working with turn key companies or finding your own deals?
I like “time” so part of me only wants to work with turn key providers, but I like bigger returns as well, so maybe in the long run that will create more time.
What turnkey companies do you suggest working with?
What method do you use to find the “deals” and do it on your own? If you do it on your own but you live out of state who do you work with?
Most Popular Reply
Here is what I tell W2 employees... For those who are able to save more than $30k a year or have substantial liquidity (over 200k), being a landlord and especially flipping is a lot of work. If you like it cool/good for you... but just remember why we got into this... To be free from a JOB. A lot of us (80%) who stumble upon passive investing and start drinking Kool-Aide will be financially free in 4-7 years pending taking action. So I always urge people to start with the end in mind and take a more passive approach.
Do the math here… you with 300 dollars per property (2 months of work to buy a turnkey rental) you are going to need 20-40 of these to replace your income. I have 10 of these and have systems in place but have 1-2 evictions a year and 3-4 big things that happen. Image if I had 30, just 3 x those numbers.
Directly investing in a turnkey rental or small MFH is a good way to start to learn and build up the war chest to go into my scaleable investments such as private placement syndications. Whatever you do, try to be as close to the investment as possible. This is the fundamental problem I have with Wall Street who takes too much fees off the hard-working efforts of the middle class.
If your net worth (income minus expenses) is under $200,000 or barely save $30,000, syndications are not for you. Stick with these Turnkey rentals despite what Gurus (who are trying to sell you their program) tell you for now. They have a little higher gains (a lot more volatility) but a syndicator who is willing to put you in a deal with more than 10-20% of your net worth is asking for trouble.
*PS never like the idea of wholeselling where you basically steal houses from people at 50 cents on the dollar and say you are "helping people solve problems"