Alternative to turnkey purchase

[Adam Meese]

I’m currently looking at purchasing my first rental unit near Dayton, OH from a Turnkey provider. I work full time, have a family with small kids and I’m located in Salt Lake City, Utah where Ican’t find cash flowing properties, much less in my price range (~70K all in financed with 20% down payment). I don’t know Ohio very well, much less Dayton which is why I like the TK option and what they provide (i.e. full rehab, intimate knowledge of the area, understanding of home/rent prices etc). The prices offered by one TK that I am looking at are in the $70K range but I’m finding homes (that “appear” well kept) on sale on the same street or right next to it in the $20-40K range.

I’m tempted to just try and venture out on my own and purchase a property at half the cost of the TK property. If I did venture on my own I would not buy a home that required major rehab (I have no idea how to manage a rehab long distance). Even if I spent $10-15K in repairs, new paint etc this would still put me well under what the TK is offering and provide a much better cash on cash return with way better cash flow.

I think it would be best if I partnered up with an investor friendly GC or another BP member in that area…but I’m not sure if this is the best approach or how to go about that. I think the less risky choice is the TK provider, but that also means less cash flow….but I’m not sure how to get started on other options or what other options I have aside from what I mentioned.

Any advice the BP community has is greatly appreciated! Thanks!  

[Darrin Carey]

@Adam Meese There are three turnkey providers operating in the area. They do charge a premium for their services. At least one of them is bringing their properties up to a high standard for the area. The other two I haven't been in enough of their finished properties to say, although in one property I saw from one of them it was refreshed, but not up to the neighborhood expectations.

The suggestions above about working with a local PM are good. Sometimes they have clients wanting to sell a property also.

Local investors are also a source, and as you've suggested, BP is a great resource.

If you want to chat about the properties or areas your looking at, give me a shout. I'm always happy to help another BP member with our local area.