All Forum Posts by: Dustin Cook

I recommend not doing turnkey.  Get an investor friendly agent and take the trip out to the market you are investing in.  Turnkey is usually overpriced, a lot of times a total scam, and you can do way better with little effort very easily. 

Ali, I told your associate Melissa about my terrible experience  in great detail, from the provider who you keep advocating even still.   I haven't heard back from you personally, or heard your response about my complaints.  Happy to talk you anytime.

I just got back from Big Bear and I noticed that there were realty businesses all over the place and a ton of inventory for sale. Does anyone on here do vacation rentals in Big Bear? Do they cashflow? What are the appreciation prospects? Should I be concerned that it seems that there is an excess of inventory or should I see that as an opportunity?

I am investor located in Los Angeles.  Currently, I invest in out of state buy and hold rental properties.  I have been intrigued by the vacation rental idea for some time now and was wondering if I could get some responses and talk to some people on this.  Would love to connect with vacation rental property managers and investors in Big Bear.

Welcome to Bigger Pockets Kevin.

This is the standard line used by turnkey providers, referrers and marketers. I couldn't disagree with you more, and I am so glad I didn't take that advice.

If you don't visit the operation you are a fool, and I considered doing this too so it's good that you ask. I visited an operation in Indianapolis that is supposedly one of the good guys. The rehabs were awful. The sales prices were $10-20K over anything else ever sold in the neighborhood. The rents were $100-200 over all comps in the neighborhoods. So even if they managed to get a tenant in at inflated rents, it's only a matter of time until that becomes a problem. Basically if I would have bought site unseen and taken their proforma as truth, I would have been ripped off and been underwater with a negative cashflowing property. There are probably good turnkey providers, but I think you can do much better by buying off the MLS and having a buyers agent on your side. If you buy turnkey you have no representation and you will pay more. After my positive experience using an agent and going off the MLS and my negative turnkey experience I really am down on turnkey now. Especially in Indianapolis in the fall heading into winter the MLS has listings all day long at great deals with great cashflow, using actual numbers and actual comps. Spend a few bucks and go out there. Feel free to PM me with any questions.

This is so scary.  I wouldn't want to go through this, even if it does somehow work out.  I mean just getting ahold of someone will cause you to lose many days off your life due to the stress.  No thanks.  Subscribed and eating popcorn.

I used an agent.  Looked at 12-13 properties in one day.  Identified the one I liked the most.  Made an offer and it was accepted right away.  Hopped back on a plane to Los Angeles.  The agent ran sales comps, and I asked several PM's to give me a rental estimate.  I bought for $113K in an upper middle class, suburban neighborhood.  2001 construction, brand new roof, paint, carpet and appliances.  It should rent for around $1200.  Maybe more if it were spring or summer.  REAL numbers.  Extremely easy.  For $113K from a turnkey you won't find anything in this neighborhood.  Yes they might sell you something for $113K in a B- neighborhood, built in the 1950s worth $90K, and tell you that rent is $1200 when the comps really suggest $1000 rent.

Welcome Mitchell.  Which market are you looking at?  

If you do buy from a turnkey provider I would advise you to make the trip out to see the operation.  Plenty of these turnkey providers are scamming out of state investors who are buying inventory in worse than advertised neighborhoods, with terrible rehabs, site unseen.  Turnkey providers tend to have inflated prices.  In my experience I saw properties they were selling at tens of thousands above anything else comparable in the neighborhoods.  They claim inflated rents above what is realistic long term.  Even if they actually have a tenant in there at higher than market rent, you will have problems when that tenant moves out.  They try to shoot for the highest possible rent to make their proformas look good and so that they can charge a higher sales price.  You can try to ask an independent property manager to check rental rates for you to make sure that the rent isn't inflated.  Also the proformas that they will show you are usually too optimistic, leaving out lines like capital expenditures, anticipating too high of appreciation, too low of vacancy, etc.

So do your due diligence and visit the operation or you are making a big mistake. And if you make the trip out to a market that you are interested in, you will probably find that you can find better value right off the MLS. You will have an agent thats on your side, rather than buying from a provider without representation. Part of appeal of turnkey is that the property comes with a tenant in place. The property management they use is a part of their team though. Making a conflict of interest on getting any tenant they can find in there at that highest possible rent. I'd rather get an empty property and find my own independent PM. My two cents. Good luck!

I would love to get a quad in my working class neighborhood, Lincoln Heights, on an FHA loan. Convincing my wife to move out of our year old home and occupy one of the units for a year though would be a tough sell.