All Forum Posts by: Chris Clothier

 My oldest son will flip out when I show him this picture Jay.  He has wanted to be a pilot since the age of 5 or 6 and flies this plane on his computer simulator.  He is only 13, but is pretty set on learning to fly.

@Nathan Flanigan -

When you are reviewing the possibility of going Turnkey, be sure and read some of these BiggerPockets.com blog articles.  Know what to look for and what to ask and you may find that Turnkey is a really good option.  Sometimes an 8% consistent return may be better than the initial 12% you were quoted on paper.  Just for the sake of education, read before you go the Turnkey route.

http://www.biggerpockets.com/renewsblog/2014/12/17...

http://www.biggerpockets.com/renewsblog/2014/05/02...

And this one has more to do with management than actual Turnkey investing, but more turn key properties come with some form of management in place.  Property Management will the the difference in your property performing and not performing up to your expectations.  There will always be ups and downs, but bad management can kill a great investment.

http://www.biggerpockets.com/renewsblog/2014/03/12...

Best of luck to you - 

Chris

@Cameron Ellis - If you are interested, I'd be happy to go to lunch or grab a coffee or something after the new year and answer any questions you have.  As you know, there are no secrets to success in this business.  You work your butt off, treat people the way you want to be treated, act with honor and honesty and keep your word.  If you can do those things, then the systems become easy to put in place and I will share anything with you that you want to know.  

You are correct too in something I read between the lines of your post.  We use "systems" for organization and communication.  But there is also a system to everything else.  A system that says you take certain actions, perform them in a particular way and always in a certain order and you always inspect what you expect!  Because over time, every system has to be tweaked and changed in order to keep growing and getting better.

Hope to hear from you if you want to take me up on my offer.  All you have to do is bring a pad, pen and your questions.

@Jill H. said, a company like mine would not have any interest is selling other companies properties and without the MLS, you could be up against a wall. Do you have a marketing budget? If not, you are going to be relegated to placing Craigslist ads in cities where you are looking for buyers. That is harder said than done. But, we have had success their too - it was a long time ago, but we generated leads through Craigslist, postlets, Vimeo ads, etc... Lots of free places to place ads, but it will be difficult. You also need to list whatever you are selling here in Biggerpockets.com marketplace. Whether a buyer comes from BP or not, you have a better shot of getting a BP forum post picked up in a Google search than any of the other free sites.

For those saying you cannot sell Turnkey properties on the MLS, we do. Every month in all three cities. Every property we sell gets listed on the MLS and while the percentage that sell from an MLS lead is very small, they do happen. Not being able to list them is like tying your hands behind your back.

I think no matter how you go forward, if you do not have an active buyers list looking for Turn-key properties it is going to be tough.  If the owner really is a turnkey company and they are turning to an agent in Atlanta with roots in Memphis to sell the properties and you don;t have experience selling TK properties, then they may be in more trouble than this posting shows.  Good luck to you.

I agree and would think the bigger issue may be the $`1200 rent.  That is a strong rental range, top of the market for average rents in Memphis, so it would have to be in an area that is commanding that rate.  Or....it could be an inflated rent expectation.   Good luck, @Vonetta, this would be a great deal for you if all of the numbers work out to be correct.

Just wanted to reach out to the Southern California investors on the site and invite anyone interested to the January meeting of the OCREIA.

I have been a colleague and friend of Kaaren Hall for several years and have known that she runs a great local REIA in the Orange County area. Her and I were talking earlier in the year about me coming out and sharing some of the data and tips I have garnered through the years for investors buying passively far from home. The date we landed on was January 2015 and it is coming up quickly!

I just wanted to post the event and invite anyone from the site to attend the OCREIA on January 8th.  

Here is Kaarens' Meet-up registration page along with location and time.  http://www.meetup.com/Orange-County-Real-Estate-In...

I do not talk in front of many REIA associations so I am excited to present some cool topics I have been writing about here lately. There are definitely pain points and traps that investors want to avoid when buying real estate, but all of those are magnified big time when choosing to invest far from home! Passive investing does not mean you become passive about your investments and I really look forward to talking about what I have learned the past 12 years!

We are managing just over 2700 properties in three cities for 850+ investors so I have definitely developed a few thoughts on the good, the bad and the ugly when it comes to passive and Turnkey real estate.  And for those of you wondering....I am not coming to sell property!  This is not about you buying, there is plenty of time for you to do your due diligence on my families company.  This is all about learning how to protect yourself if you choose to go this route - no matter who you deal with!

Again, feel free to join Kaaren's REIA group, OCREIA if you have not already and I look forward to meeting anyone there that night!

All the best - 

Chris

Good job Derrick, well done!

 Mike - 

Jay is commenting based on his working knowledge of property management.  He has been around a lot of companies who are staffed properly and have the right tools and software to manage a rental portfolio.  He is correct in the big, broad statement that managing 20 units for $75 each with no placement fee is a losing proposition for most people who try to go that route.

It may have come across a bit harsh, but after 12 years I agree with him and would caution you against trying to implement your plan.  With that being said, if you want to give it a shot, knock it out.  My experience has been that you would not be the first to try, but could very well be the first to succeed and be good at it.

There are absolutely investors who shop price for management.  They may be attracted to your offer.  I don;t personally know any investors who would because I work with investors who place a high premium on service and value.  In your model they would know that they are not paying for service, they are simply paying someone to pick up rents for them.  Service calls, maintenance calls, midnight move-out calls, bankruptcy calls, eviction calls, court-related calls other than eviction....these are the things you may not be thinking of and your owners would know that you may not be willing to handle. Jay's premise, and again I agree with him, is that you would go broke either in dollars or energy when you realized how much work it takes and how low you are putting your own self worth in dollar value.  

That is why you hear the magic number of somewhere between 250 and 350 properties as being the critical mass number you  need to achieve to be profitable and that is with a full host of acceptable charges that a management company can capture.  It is a tough business with a lot of work, time and headache.

All that being said, I never look to stop an entrepreneur!  So if you think that is a  model you would try to run one day, like I said, knock it out and I would love to hear if you can make it work. 

 Just came across your thread Ryan, but I had to laugh when I read it.  I guess great minds (giving myself the benefit of having a great mind!) think alike, because this is exactly how we rented our properties at the beginning.  We used this same technique in Memphis all the way up until we had almost 1,800 properties under management.  The competition that it creates is undeniable and it allows super motivated people to rise to the top.

We recruited real estate agents (97% of which do not make money) to come rent houses for us and several earned 6 figure incomes because they worked their butts off.

We used to let the top producing rental agent put their sign closest to the street to get the calls first.  It creates an incredible environment for competition and I think Ryan nailed it on the head with this post that this is a great way for those new to real estate to get involved, earn and learn all at the same time. 

@Chad U. - We use the same type of clause when appliances are present in a property.  And you are right, they always leave the broken appliances behind and never tell you that they broke something...especially not the dishwashers.