All Forum Posts by: Kevin Smith

In two weeks we could be getting razor blades to our wrist if Joe wins.

Board up your treasures and change your money to something worth while,

It will get very ugly for North America!!

Wearing mask for 5 more years and Socialism .

Vote smart BP.

@Kevin Smith I'll second (maybe third, I guess). You don't need an LLC right off the bat, and it would likely make things more difficult at this stage - don't make anything harder than it needs to be!

I also agree that C/D or War Zone areas are just not worth your time or your money. Yes they are cheap to buy, and yes you have tenants that are essentially trapped in that price range, but that doesn't mean that your property will be worth anything to anyone else OR that your tenants won't bounce around to other props/ cause you endless headaches. 

If you buy a cheap property in a bad area, it will always be a cheap property, no matter what you do to it. You also have zero exit strategy because no one that lives in those areas is looking to buy a home, meaning when you do want to sell (which would likely be sooner rather than later once you see what you're up against) you'll have to sell to another investor, who will want to pay less than market value. Factor in the Section 8 bureaucratic nightmare and, frankly, it's just not worth it when you can invest a bit more (sounds like you're looking at a good starter ranger around $100k) and get a solid B/B+ property that will flow nicely and offers some chance of appreciation and a much stronger possibility of selling to an owner occupant down the road.

As Jeff said, turnkey can be a mixed bag. It's an awesome investment when done right, but there are plenty of people looking to fleece you. Look out for flashy marketing about "ROIs you wont believe" or "Will sell out soon, must act now!!". If their marketing sounds like a used car salesman, look elsewhere. Your due diligence is key when you're investing out of state, so focus on finding a team you really trust as your first priority if you're going the turnkey route.

If/when you get to the point of vetting turnkey operators, take a look at this list of questions you should be asking to ensure you're working with a quality provider with a worthwhile product:

https://www.biggerpockets.com/forums/55/topics/361999-new-investor-from-glendale-ca

Good luck!

@Kevin Smith Hi and welcome to BP!  I also on the West Coast, and thus far all my investing has been out of state.  I started with turnkey properties and have moved into other areas as well.

I don't advise establishing an LLC if you are thinking of financing properties, because they are not eligible for conventional financing. You have to go commercial. On the other hand if you are thinking about buying a $30k property out of state, I'd say think again for two reasons:

1) A conventional loan at this price (or really anything 50k or below) is essentially unattainable.

2) This price range (especially turnkey) will give you more headaches than you ever dreamed were possible.  AVOID IHMO.

Frankly your friend sounds like a slum lord (check out the book Evicted for some insight).