All Forum Posts by: Jonathan Paul Shortt

Great points by OP. Tough environment and very unpredictable. Anyone who claims to know what the future holds is full of it. I still believe that as long as your numbers work, buy the property. Especially if you buy and hold, even if the market does go down by 50% in a month, don’t sell and you don’t lose the money. If it is your first deal, ask an experienced investor to double check your numbers.

I am finishing up a BRRRR in a small town 30 minutes outside of Dallas. I am contemplating making the property available to Section 8.

Given the current economic climate, (which I think is in a much more dire situation that some perceive) do you see an influx of section 8 demand?

@Irina Seals what you found is a stabilized rental, basically a BRRRR without the rehab, that cash flows. Arguably even harder to do with built in equity. Well done!

@Irina Seals congratulations!!! Strong numbers, and as you have pointed out, your money was made on the buy.

The only thing that might be confusing for some is I would not describe this as a turnkey purchase. You hustled on your own to find and negotiate a property that works for you. You did not use a firm that finds the property for you, rehabs the property and then manages the property, which I think most consider turnkey.

Again congratulations!

Jonathan

Hey Terry,

I am in Dallas and it is super easy to self manage. The local property management is charging 30% which is absurd. The cabins are expensive, the land is cheap. For me though it's more about looking at what is my ROI. Would you buy a $350k home in Conroe that has gross rents of $5000? I don't care about price per sq. ft as long as the property cash flows. And these do as long as you self manage.

@Chinmay Nerurkar

STR stands for short term rental. These properties are in high tourism areas that I list on VRBO and AirBNB for nightly rental. The returns can be significantly higher than long term traditional rentals but also come with their own risks.

@Chinmay Nerurkar

This property I bought actually was through roofstock. And nothing against them at at all, the process was very easy and they were very upfront and honest. The property had been rehabbed and rented by a local provider in Missouri.

The problem for me is any turnkey house has to provide profit for so many people that your returns are diminished because your price is including all the profit it needed to build along the way.

Turnkey is fine, I just can get the same returns as turnkey in the stock market, or I can get exponentially higher returns in BRRRR or STR.

Thanks!

@Lin Chen

https://www.vrbo.com/1960009

10% down 30 year 3.5% interest for this one. Traditional 20% down for the next and then will probably put the 3rd in my wife’s name using 10% down second home again.

With 10% down you do have PMI and have to escrow insurance and taxes so keep that in mind. Wasn't a big deal for me.

Thanks!

@Claudia Adams

The turnkey property has been just ok, and it is hard for me to be too upset about it, because it was my first REI purchase. Like most people say, at some point you have to take the plunge, and for me turnkey was the easy way in. Now that I have just a little bit of experience, I quickly realize that value add and short term rentals are much more lucrative ways to invest, but they do require more work.

In general the turnkey property has to generate money for multiple different people throughout the process that by the time it reaches you or I (the end buyer) we are paying close to retail which produces sub optimal returns. If I want 6-10% return on my money I might as well just throw it in a vanguard fund and leave it as that is an even more passive way to achieve that return, and the turnkey properties I have looked at will not return more than 6-10%. 

I also have a full time job but am putting some systems in place, especially for my STR that automate 90% of the business, and I will achieve 30%-40% CoC return.

Many much more experienced people on here will tell you the money is made when you buy, for me moving forward, buying turnkey makes it impossible to make the kind of return I am looking for.

Jonathan

30, bought my first last year from a turnkey provider, wont do that again. Have one short term rental and closing on a second in September when it is finished being built. Currently rehabbing a brrrr as well. Will continue to buy STR and use cash to brrrr in my backyard. Goal is to have 20 properties by the end of 2021.

Thanks for posting!!