All Forum Posts by: Bradley Chapple

@Ryan Copeland

Nothing against where I hang my hat, because Northern Colorado is amazing. But my motivation for investing OOS is affordability. Around here, $250k might buy a 2 BR fixer-upper meth/hoarder house. I’d rather go east, where my limited capital can provide more leverage. 😉

@Ryan Copeland

I have the same goal: 2 out-of-state properties in 2021.

I am also in the camp of under-promising and over-delivering, even if it’s to myself. It greatly helps with momentum, and I’m too hard on myself when I don’t meet a goal, so I’m way happier when I blow my goal out of the water than when I fall short.

@JD Martin

Biting the bullet, paying off the collectors, and getting that behind you will definitely help, regardless. Many debt collectors will actually take a much lower offer than what they say that you owe, so give that a shot. If you still have active collection accounts on your credit report, you might as well be radioactive. Paying this off and getting this stuff behind you will do a lot of good both financially and emotionally. Turn that page and get to the next chapter, brother.

I can relate to @Terre B. About 10 years ago I was in the same spot, and it was a struggle to get financing on anything. Due to only having family and "friends in low places" getting put on anyone's card as an authorized user wouldn't have helped.

But I did the other things Terre mentioned and it helped a lot, especially the credit monitoring and getting back on your feet with a very low-limit, secured credit card and paying it off every month, etc. Try applying for a credit card with your bank or credit union first since you already have a relationship there (they will look at your credit too but may be more forgiving if you have your money there).

Eventually, you'll start getting some other credit card offers in the mail for an unsecured card. Go ahead and get a couple of no-fee cards (if you can) but pick some that you can hang onto for the long haul. Don't ever close them, since the average age of your credit card accounts factor into your credit score, so get a card that can grow with you.

Unfortunately, you're going to get raked over the coals by lenders until you can get your credit up. It's not completely fair that a number can serve as a one-size-fits-all predication of your future reliability since everyone's situation is different and bad things happen to good people all the time.

Here are a few suggestions/ideas, off the cuff:

1. Attend a local real-estate meetup group in your area and explain your situation. Tell them that you're looking for a way to leverage your cash without involving your credit. You may find a partner who is willing to work with your capital for a percentage of the profits. Be somewhat skeptical and check references. Do your homework, and before you write any checks make sure you have an iron-clad contract in place that you've had reviewed by an attorney.

2. Invest in REITs, which can average around a 10% return. It will require some research, but there's a lot of information out there on REITs. There's also eREITs like Fund Rise that are growing in popularity. Unfortunately, you won't have control of these assets like you would if you owned the property, but it's also much more passive. Also, you won't be getting the same tax benefits (depreciation) as you would if you owned the property, but this could still help offset inflation.

3. Keep saving like crazy until you get enough money to pay cash. There are still some places in the midwest where you can buy sub-$60k properties, but they are usually very distressed so they'll need some major work. Sometimes they're also in not-so-great neighborhoods. If you can do the work yourself, it will require a lot sweat equity that you put in over weekends and vacations. Alternatively, you could save up enough to have someone else put in the sweat for you (time vs. money).

I hope this helps.

@Aaron Holderman, I'm a little north of you, here in Fort Collins. Colorado is a hard row to hoe these days, and I think just about the only place you might find some opportunity for both appreciation and cashflow is Pueblo. But, it's a little rough down there, so consult with some investors who really know the area inside and out before you get too excited.

With Pueblo being 3+ hours away for me, I'd have to get a PM anyway, so I might as well invest OOS east of here where I can squeeze more leverage out of my limited cash. Luckily, there a lot of good opportunities to be had a straight shot over on i70 (Kansas City, St. Louis, etc.).

In the meantime, I fully agree with James. You should own your own home here first, and look for ways to offset the expense by renting part of it out, even if you have to do some modifications to your home to make it work. Adding a mother-in-law suite would not only add value to your home but would also allow you to rent it out (whether you could do so legally would depend on your zoning laws of course). If that doesn't work, even renting out a bedroom could help. Even $500/month would be $6k a year, which is a third to one-fourth of a down payment on an OOS investment a little further east.

Thanks, but I wasn't asking if there were PMs that perform a service for free. Expecting such from a PM company would be naive, however, expecting a win-win relationship with a paying client shouldn't be.

Yeah, that is definitely a conflict of interest (perhaps not in the legal sense, but still).

Is it normal to have this type of adversarial relationship with the PM managing your properties? Are there PMs out there who base their success on your success by aligning their goals with yours, or is this just the wishful and naive thinking of a RE newb?

All of the negative comments (although I'm sure most mean well) are somewhat disheartening to someone wanting to just get started any way they are currently able. Granted, I have no idea what I'm talking about, but it seems to me that Turnkey is a great way to ease into out of state investing.

So, @Aj Parikh, I commend you for both getting started and for keeping a positive attitude despite the naysayers (and even being called a shill). Hopefully, even if this investment doesn't pan out as well as you'd hoped you can find a way to do things slightly better next time, and then even better on your third.

Then again, maybe it will turn out great and you'll just do it again. After all, you did find a property that achieved the 1% rule, which is better than a lot of the "investor specials" I've seen out there. Either way, you're going to learn something which is what those first two or three properties are all about.

I guess Aristotle was right when he said, "There is only one way to avoid criticism: do nothing, say nothing, and be nothing."

Congratulations on getting started, @Aj Parikh. I'd be excited too. I do hope you keep us all updated on how your investment pans out over the long haul.

I have been thinking of dipping my toes in the Turnkey pool myself since I work 60+ hours a week with an unpredictable schedule. I just went out and looked at their properties and their FAQ and saw this:

"The property managers we use charge 10% of collected rents. If a new tenant is signing a lease then the property manager takes 1st months rent as a fee. If a tenant is renewing a lease then the property management company will charge a nominal fee of $100-300."

First month's rent? Ouch.

Do most property managers charge this much for putting a tenant in a property?

What incentive would they have in keeping the tenants happy and eager to renew their lease if the company profits more from turnover? I'm always on the lookout for conflicts of interest and this seems one.