All Forum Posts by: Lee Ripma

You want to post in Facebook marketplace. Sign yourself up for an account and join the local groups. You can post to the groups or you can post in the marketplace. I use the marketplace. You get a ton of eyeballs and will need to field a lot of questions (even if they are in your post).

It really depends on your market. I can set my replacement cost value and pay insurance accordingly. I insure for what I owe and my equity but not the full replacement. If my place burned to the ground then I would get my loan paid off, have my equity, and sell the lot. The cost to rebuild would be too high to rebuild what is there now. Of course, that could change depending on values in the market but I can adjust my policy whenever I want.

Yes, you can't force appreciation on a turnkey. Also, they tend to be in areas that don't have that much potential appreciation, at least the ones I looked at in Kansas City (I'm sure there are exceptions to this). So you're looking at the slow and steady appreciation of the midwest. What is that appreciation over the next 20 years? More than inflation? 

@Mike D'Arrigo

No, those examples would not be turnkey, they would just be available on the MLS. Are there really so many different ways to define turnkey? It means that something is already fixed up - you turn the key and go.

I totally get why people would buy either a turnkey property or from a turnkey company. I personally would never buy a SFH fixed from a turnkey company. I think when you start to add up the true costs and lack of appreciation you're going to see that you could have gotten the cash flow you are seeking from something that is actually passive and does not come with the risks of real estate. I'm a value-add investor because I don't have truckloads of money to go out and buy expensive cash flow!

@Megan McGinty

I agree with what others have said. You can also setup a site with the properties listed but don't give folks access without vetting them first. You'll find a lot of templates that wholesalers use to send out mass emails and on the email there is CMA and pictures. You could do something similar that way qualified buyers can peruse the list on their own and let you know if they want to buy. Again, just make sure you vet the folks on that list. If you send me a PM with your email I will forward you what I get from wholesalers so you can see.

@Stephanie Douglass

I will echo what others have said, it really depends upon your goals. Keep in mind that if you go for a value-add approach rather than just buying cash flow you can use that chunk of capital over and over to create cash flow (this is BRRR or value-add).

Another thing to keep in mind is the rule of 72. If you take 72 and divide it by whatever interest rate you can get then you'll see the doubling time on your money. So if you can get 10% that is 7 years. 12% is only 6 years. So let's say you get 9% for 8 years (lots of people will give you that to use your capital for RE). Now you have 300k. In another 8 years you 600k and in another 8 you have 1.2M. Do you want to wait 24 years to have 1.2M dollars? Do you want to just buy a house to live in? Do you want to buy dividend stocks? I guess it's all about what you want. Go wild. Then figure out how you can use that 150k to help you get to what YOU want. 

If I personally had 150k to put in RE I would use it as the downpayment on a value-add apartment or small MF that cost 300k and needed 90k of work to bring it's value up by 20% or more. Put down 60k with a commercial loan, then pay 90k for the work, then it's valued at 470k. Then I would sell it and do the same thing again and again. At some point, I would start holding the apartments to have cash flow. If I could cash out 100% of my capital from each one then I would hold them from the start. I would not care which market it was as long as it had 1) a ton of jobs 2) population growth (linked to jobs) 3) I could find trustworthy people to be on my team.  

Now you got this money tax free so really you could use it for anything, you are not limited to RE. Maybe you want to start a business, get an MBA, become a yoga teacher, etc. You don't need to use it in RE. There are many businesses that will kick off a lot more money then RE then you can use the money that business is generating to buy cash flow or do some of this value add I'm talking about. 

Good luck and keep us posted!  

Are you willing to do a commercial loan or are you looking for residential?

@Elaine Hester

Turkey means something that that is rent ready and already rehabbed. A turnkey company sells SFHs that are turnkey. I would not buy a SFH sold by a turnkey company. I would buy a turnkey apartment if I had a lot of capital. I would consider buying a turnkey home off the MLS in a good area with a lot of appreciation potential if I had a lot of capital. I mention the capital because if you're not doing value add then you're buying cash flow. There are a lot of places to buy cash flow that do not involve the headaches of RE. If you have lots of capital and you want to park it to get cash flow, okay cool. If you don't have a lot of capital you need to do value-add so you can reuse the same chunk of capital over and over.

I was in your same boat about a year ago. I bought a value-add small MF and rehabbed it. Now I have almost all my capital back and I'm looking to do it again. It was a huge project but now it cash flows well even without much capital in it. This works for me but it's not passive! 

“There goes the neighborhood”

First step is to check your zoning 

http://apps3.sandiego.gov/siteinfoweb/begin.do

Then you can start to figure out what can be legally built using that zoning and the appropriate setbacks and ratios. If you PM me the address I'll do it for you.