Turnkey success

[Kevin Byrne]

I have recently bought one single family residence from a turnkey provider in Indianapolis and am looking to buy another one possibly in Memphis or elsewhere before the end of this year. I was hoping to hear from investors that have bought primarily from turnkey providers and have a decent size portfolio. Basically, I am looking for proof of concept. I would really like to speak with someone who has been successful investing primarily with turnkey providers. So, is it possible to be successful buying only turnkey properties?

[James Wachob]

Hadar,

The B Multi Family is easy to find... the problem I have with out of state and foreign buyers is the limited financing.

My US citizen buyers can expect 35%+ down payments.

ReedyandCompany.net would be a perfect fit to manage a Multi Family for you. They personally own 5 apartment complexes and manage another 2 for other investors. 

*See below a deal from the biggest Multi Realtor in town:

Grove Apartments

Memphis, TN 38134
Price: $5,900,000
Total Units: 98
Cap Rate: 7.1% based on 2014 NOI

Building Sq. Ft.: 105,844
Land Size: 6.52 Acres

B+ apartments built in 2001 with new lifetime roofs, low maintenance exterior, cash flow plus value add through professional marketing!

Assumable loan - $3,950,000
4.25%; Monthly P&I: $24,459.76;
Maturity: Jan. 1, 2025; Escrows taxes and insurance
Assumption Fee: 1.5% of UPB, plus a $5,000 admin fee

[Alex Franks]

Originally posted by @Lane Kawaoka:

David Hutson I have almost a dozen of these. Isint it getting to be a pain to have little SFHs? I thought I wanted 30 of these but my opinion has changed.

@Lane Kawaoka have to agree 100 % its just a bit harder for most folks. I am in between on this. As I  build turn key new construction but yet I buy apartments for my own portfolio . With a heavy focus 30-60 units. If I was to start over in this business I would educate my self on both TK and apartments( syndications , and buy and hold). Then again to each his own. Then on the flip side I am opening a hardmoney company for some turn key guys here in Charlotte. So again it really depends on what folks are trying to accomplish. I can pick 10 TK folks  from different states all are very good. Just depends on what folks, game plan and thought process is.

Alex

[Alex Franks]

Originally posted by :

 I see you mentioned few times here that you know of Multi family deals. I own a few in NZ where the rental demand is good and capital gain is reasonable. I read here that in Memphis it is hard to come by good multi family complex/units (we call them blocks of flats in NZ) in say B locations with reasonable returns and low vacancies, Turnover is high do to people preferring houses then units.

Typically in Memphis in B class location what return one could expect?

Also, are there any local property managers who specialize in MFH?

Thanks in advance James and other members for your comments,

@Hadar Orkibi,

I think the USA as  whole multi family is getting over priced or the top of the market. I think we have an 18 month window. Just not sure where we are in that window right now. @James Wachob has good understanding of both the commercial and residential side of things here in the USA. Funny thing we both are dealing with or dealt with the same Investor /partner from Auckland NZ. Small world after all. I am more then happy to provide details on Multi family from Charlotte or Surrounding area if any interest. Nothing to sell as we buy and hold these units.

Sincerely

Alex

[James Wachob]

@Alex Franks come to Memphis soon and I will show you what we have going on. I have a 58 unit apartment complex that we are totally renovating! 

its on my website if you want more info!

[Dean Letfus]

For what it's worth Hadar you have to be really, really careful with multi family in Memphis, especially as an out of state investor. Paper returns are ALWAYS better than in your jeans, there is a whole other skill set required to understand management, maintenance etc. I meet 10 owners who wish they'd never bought for every one who is happy.

Triplex's and quadplex's are fine but get into small apartment buildings location is critical and the returns are hugely variable. Nothing like back home son.

[Hadar Orkibi]

Thanks for sharing @James Wachob, nice block. To be hones for 7% Cap and 35% down we can buy Commercial property in NZ which is what you cal triple net lease, so no hassle and the tenants pay for all outgoing. I sold 4 unit multifamily in Auckland NZ last year and paid off the debt on the Block of 5 retail shops and flat and never looked back. 

I also hear that as per @Alex Franks comment the MF in the US is at or near the top of the cycle (not surprising with such low interest rates), so unless its a great deal where one can dd value by tiding it up and increasing rents and NOI its possible not the right thing for me. I think that good single families, duplexes or triplexes would be the best option for starters.

In GENERAL looking back to 2008-2012 the US and NZ cycles are running somewhat parallels, so if this is close to reality perhaps in 24-18 months the markets will level off.

At this stage I'm trolling the forum, educating myself on the locations, returns and keen to interact with Key players in the locations. As a US Citizen residing in NZ I'm also investigating founding opportunities.

[Nick Smith]

Larry Fried can you pm me the company for which you wrote the article about the holy grail of investing

Thanks!

[Kenneth Dai]

@Nick Smith and for anyone else looking... Larry Fried's article is on the BP blogs:

holy grail blog

[Larry Fried]

Originally posted by @Nick Smith:

Larry Fried can you pm me the company for which you wrote the article about the holy grail of investing

Thanks!

 Nick, I sent you a PM.