All Forum Posts by: Kyle Scholnick

Silly question, but how do you address someone in the forums so they get an email that you are talking to them?

How do you get their name highlighted in blue with the @ sign in front of it?

I know its just a few keys you have to type, but can't remember how to do it.

Thanks!

As usual....crickets from the turnkey world.....

Ali,

How many turnkeys do you actually own?

The information I provided I admit, I did not do any extensive market research or statistical data analysis, it is just what I have noticed from talking to many people on this site....Many of them say they got started in turnkey, learned the process of investing and then went out to do it on their own because they didn't feel they "needed" the turnkey...which again doesn't make sense to me for us busy professionals.

From what you were saying about turnkeys being a newer concept...I understand that, but I don't buy that someone couldn't accumulate a lot of them over a period of 6 years. Buying 2-4 properties per year with about 20-30k down doesn't seem out of the realm of possibility, I know many people that can do that easily, especially since we are talking about turnkey and they aren't doing any leg work of finding deals or managing. So that is my question...where are all those people? Maybe not owning 30 turnkeys, but what about 15? I still don't hear from any of those people. I always love your opinion Ali, you are very helpful, but it seems like its always the same 6 marketers that respond to all turnkey inquiries. Where are all the happy and rich investors who own 10 turnkeys?

You said you know some specific people who own a bunch of turnkeys other than yourself, can you provide some of their information or tell them to hop on the site because I haven't heard from them.

Thanks for your response Ali

I know there are many people who like to get their feet wet with turnkey, but does anyone actually own ALL turnkeys? Does anyone own 30 turnkey properties?

Can anyone actually speak up that owns nothing but turnkey and has had a great experience?

I rarely hear from anyone who owns turnkeys other than the turnkey provider marketers, and of the people that do own them, it seems they only own 1-3. Is there a reason for this?

I want to believe turnkey is a great investment for busy professionals who have no desire to rehab/find deals/landlord/manage properties/deal with contractors etc....but why isn't it more common then?

I do also get concerned when I see proformas by turnkey providers that are only accounting for 5% vacancy (seems optimistic since just one month vacant should be 8.3%), 3-5% maintenance which seems low, absolutely no Capex inclusion etc.....

When you put regular numbers in to account for those things, it seems that many of the turnkeys aren't profitable...Don't get me wrong, I'm sure you make something, but just seems like 6-7% after you PROPERLY account for all possibilities and have a margin of safety.

I also don't buy the answer that people got involved with turnkeys and then realized they can go out on their own and do it....this makes no sense...if they are busy professionals and don't want to deal with the headaches of real estate, why all of a sudden after one turnkey experience they are starting their own empire?

So, again, anyone out there own ONLY turnkeys and have more than 10 of them?

Real Estate is a proven way to wealth. The key is doing it right. Take what your accountant says with a grain of salt. Its all about the numbers. If the numbers work, you will be successful. Be conservative, plan for 10-15% vacancy, 15% maintenance, 15% capex, etc...use bigger numbers like that so you have a good margin of safety. If the property still looks good on numbers, don't make silly mistakes like investing in a poor price to rent ratio (like investing in DC on a 400k house that rents only 2k per month vs an Atlanta house that costs 100k that rents for 2k per month), make sure you have tools and knowledge on how to screen tenants so you don't get crappy ones that will cost you a fortune down the road.

Again, plan for a big margin of safety for the maintenance...consider age/cost of HVAC, roof, siding, electric, flooring, plumbing, etc.

This is where experience comes in...one month doesn't sound like you may have all the knowledge you need to make a successful choice and know how to find profitable rentals...but maybe you do! I have read 20 books in one month and learned a tremendous amount about certain things in one month so maybe you are all set, I'm just saying to drop the ego and really eval if you are ready and know all the things you have to do...as long as you plan correctly, no reason why you can't be successful.

And regarding your accountant, I will leave you with this quote:

"Don't let others who say it is impossible stand in the way of those of us who are doing it"

Good luck!

What is the best way to find a good real estate accountant/attorney to use for rentals? I know word of mouth/referrals is best, but nobody I know is in real estate so I can't find anyone.

I am looking in the Fairfax, VA area. Any ideas/recommendations on how to find one?

Very inspirational Billy, thanks for sharing your experience, we all need that kick in the butt to get moving. Now you will inspire more people to take action too! Great cycle!

Great advice guys, I didn't think about investing for appreciation rather than cash flow. Is there a way/website to check for appreciation overtime of a specific real estate market?

I live just outside of Washington DC where I would say the average home price is about $475,000. 

Based on the going rate for rents, for $475,000 house I probably won't be able to get more than $2800 in rental income for the month.

Can these numbers ever work out?

I am well aware I am missing some information here about a general analysis of the property but I'm just speaking in general terms. 

Not sure if this makes a difference but this is a stable area, even in 2008 prices only dropped by about 20% from what I hear.

Also I was looking into living in the house I rent out as wellfor now but eventually will move out and that will be just a rental.

What do you think, do you always have to abide by the 1% rule?

I see the responses here, and of course that makes sense that the down payment is converted to equity in the house. However it is still a business expense, is it not?

If I buy a hammer and a bunch of tools and install a sink, that hammer and the tools ians the sink is still mine but it is still tax-deductible because I'm spending it as a business expense for my business, so why isn't buying a house that I'm using as a legitimate business tax deductible?