All Forum Posts by: Chris Clothier

 Jacksonville Wealth Builders

@Kevin Darrell - Maybe repost the question and ask about experiences after three years and then again for experiences after five years.

When you take out all of the obvious advertisements to sell Turnkey properties, maybe you will get some better responses.

Lastly, you did a great job of saying thank you to everyone who responded.  

One of the reasons there are so few responses is that people generally get hit over the head on BP when they speak up about buying TK.  With such a varied audience that comes with half a million users (Ii may have organically grown your site @Joshua Dorkin ! - not sure of the exact number today), there are fewer people crushing TK investors on the site.  If you thank them for their responses and hopefully no one gets trolled, then you will get some honest and real feedback.

Like @Lane Kawaoka said, that may not be enough time to factor in much if any Capex at all, but you should be able to get an idea of what people that are satisfied with their investments did on the front end and what they do each month to stay happy with their decision.

I would ask again with shorter time frames and do just as you did saying thank you to those that respond.  It will definitely encourage more to post.

 Sunny,

The short answer is no - $30,000 Turnkey properties are NEVER a good investment.  Regardless of what anyone tells you, whatever they are selling and whomever they offer to let you talk to, a $30,000 property purchased turnkey is NEVER a good investment.  The economics do not work as there is not enough of a spread for a company to purchase a property, do a proper renovation and make a profit.  A company is going to be skimping somewhere and they will not usually skimp on their own profit.  That means they skimp on doing a proper repair or are buying a property so cheap that no one else wants it.  If they skimp on the repairs then you are left with a crap property that will never, ever perform at the level that you are expecting.

If they skimp on their own profit, then they will not be around long enough to help you out when the property goes south.  They will not be able to hire a staff to help with the business and at some point they fold up shop and leave the business.

There simply is not enough revenue to provide the service that any out of area investor should expect when buying passive investments.  The word turnkey doesn't matter.  There will never be enough revenue there to properly feed everyone....and the investor always loses when that happens.

@Ben Leybovich, that about covers it doesn't it?

@Nick McCandless - You need to hold onto your money for now and find a local or even close-by mentor to learn from.  Reach out to @Bill Manassero and see if you can buy him a cup of coffee and pick his brain.  Read up on everything posted by @Aaron Mazrillo who is close by to you.  He is proof that you can use that money right there close by like the inland empire instead of going out of town.   Neither of these people will tell you that buying 2 or 3 cheap pieces of crap in the midwest are a good investment.  Read up on @Ben Leybovich  to understand how quickly that $50,000 investment can go south when you try and spread it into too many deals.  You are much better off spending that many on the highest quality deal you can find and you should be able to find a deal close by.  If you don't want to be hands-on then listen to the advice of Bill and remember what lessons Ben teaches before you buy.

Look for high-powered real estate events such as the one in the San Fran area later this year being put on by @J. Martin .  These are the places where you are going to meet the right people and get a chance to spend your $50,000 wisely and according to a plan. I hate that you are getting hit up with sales pitches, but it is going to happen more and more as you tell people you have money, but you probably expected that.  

Your best bet right now it to stop researching and start taking a few actions to get yourself surrounded by smart mentors or experienced investors who are willing to be a sounding board as you get started.  I did like what @Alex Craig suggested that you either lend or come up with another way to build your initial capital.  You definitely want a way to keep growing your capital. 

 Best of luck - 

Welcome to BP @Frank Alvarez!

You have found an awesome resource for real estate investors.  Be sure to reach out and ask if I can help you find your way around.  I have been on BP for a while now.  Best of luck as you get going ~

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 You make a great point Brian.  That is how we built our list of 17 lenders today.  We have probably worked with over 40 lenders over the years.  Some closed one deal, some close hundreds, but a vast majority were recommended to us by an investor.  None of them are the big national banks.  We get those requests quite often and there is no need to even go down that road - it does not work.

So if an investor comes to us and says I would like to do business, but I would like to use my lender, we are able in some cases to explore that option.  Most of the time we are not able to work with their lender after looking into it and speaking with the lender.  We usually ask an investor to allow us to interview the lender, learn about their process, tell them about our company and help the lender fully understands the Turnkey investment process.  At the same time, we ask the investor to, at a minimum, speak with one of the lenders we are comfortable closing with to compare process and cost.

If we are comfortable after our conversation with the lender, then we move forward on that house and see how they perform.  If they perform well and score well in the survey, then we will add them to our roster of lenders and give them one or two at a time until they earn the right to do more business.

@Brian H. - Well, I wouldn't use the word force because buying and moving forward is always the choice of the investor.  However,  we have 17 lenders that we work with.  They all specialize in different areas such as lending only in Texas or only in Tennessee or they specialize in non-recourse lending or bulk transaction lending.  Some are able to lend on an investors first four houses and others up to ten properties for an investor.

THE kicker is that ALL 17 of them are great at customer service and know exactly how to close non-owner-occupied investment property.  We also survey our clients after the close to inquire about the process and make sure they were satisfied with the service they receive.  That survey covers 5 different areas of the purchase with one of them being the lender. 

A fast, efficient closing with few hiccups and at a competitive price is the most important thing to us.  So no, an investor cannot just bring any lender to the table to purchase a property from our company.  We have a process that we have refined over the years and lenders that we have trained to make an investors' experience smooth from start to finish.  Not to mention, it makes our own processes more efficient to know that we are not going to deal with any unexpected events or delays from an unfamiliar lender.

@J. Martin - Thanks for taking this on again!  This is a huge production to coordinate and plan so much appreciated.  I'm sure you have the program down just like you did last time and will put on a helluva program for everyone attending.

Looking forward to seeing you ~ seeing all of the speakers from 2 years ago who I loved meeting and sharing with ~ and meeting the new speakers and all of the attendees.

@Jay Hinrichs Wow!  i completely forgot about the cash out refinancing.  You are right, that was a HUGE sales pitch 10 years ago.  It wasn't even no money down, it was straight get paid to own a property!

Let's hope that doesn't come back to fruition.  

@Marlene Goldenberg , sorry for talking back and forth on your thread!  It is good info that pertains to your deal and is helpful for other readers, but hopefully, you don't think your thread was hijacked!  Best of luck to you as you look for that next best deal ~