All Forum Posts by: Taz Zettergren

@Kent Fang ching I work with a couple hundred clients that live in California and they're doing the same thing. They prefer the middle/southern part of the country because the laws are friendly and prices are more affordable. Markets like Memphis TN, Little Rock AR, Tulsa or OKC, OK. You'll be right around that median priced home where the most demand will be, not only for rentals but for owner occupants looking to purchase as well. 

@Rafael Ro And one other thing I failed to mention turnkey is a buzzword often used for marketing, but few companies truly deliver a full turnkey experience from start to finish. Many only handle part of the process but still market themselves as turnkey because the term is popular. Rather than focusing on the label, look closely at the services being provided, the value those services bring, and how that value aligns with the price you’re paying as an investor

@Greg P. welcome to the forums and congrats on the first post! It all depends on how active you want to be as you start out and how much experience you have thus far? The more actions you take of course the more money you will save but it will take more time, effort and energy while there is a learning curve which often times can be pretty steep in this industry. If you're going to continue to work while you start to build a portfolio I'd advise to invest passively, at least for the first few deals. There are companies out there who purchase homes, renovate them, sell them to investors and manage for those investors as well on the back end so it can be an extremely passive way to invest. While it doesn't provide a sexy return like a flip or BRRR it's a great way to start and it's a slow, consistent return for you. If you started somewhere like Texas, where there's more appreciation, you could do this for 5-7 years then 1031 exchange those properties into higher yielding products that'll allow you to walk away from your job. Again this is if you want to do is passively.

In regards to markets I would recommend the southern/middle part of the country because the price points are much friendly as well as the laws. Longterm my family's plan is to build our wealth and cash flow in rental properties but we focus on median priced homes. Not only are they the most conistent as far clientele you're working with these areas will have the most demand from renters and owner occupants so units will fill up quickly, more times than not with higher quality clientele. 

Happy to discuss in further detail if you're interested. Best of luck on the journey! 

I wear two hats in this conversation: as a licensed agent, I have a fiduciary duty to my clients to ensure their best interests are always prioritized. I can give clients advise and my opinion on situations but not everything is always known. Additionally, as a Portfolio Advisor at REI Nation, a true turnkey company, I help investors make informed decisions.

The real difference comes down to risk and alignment of interests. Turnkey companies assume the upfront risk—they buy, renovate, place qualified residents, and offer warranties. These steps ensure the property meets high standards and minimizes surprises. With an in-house management team and data-driven decisions, a company like this provides peace of mind for truly passive investors.

While finding properties on the open market can work, it often comes with uncertainties regarding condition, tenant quality, and maintenance history. You may save upfront, but the long-term risks could offset that savings. Ultimately, it’s about the level of involvement and risk tolerance you’re comfortable with.

@Rafael Ro

There are cash flowing deals on the open market, I'm helping clients find them daily but in some situations it makes sense to go with the turnkeys to minimize your risk. It's just a matter of choosing the right company to work with. Some are offering 5.38% interest rates on a 30 yr fixed rate at no cost to you, couple that with a 1 year maintenance free guarantee and a resident in place at closing and it can be a slam dunk of a deal

@Rafael Ro Welcome to the forums! I've got a few hundred clients in your exact same scenario, they live in markets where rentals don't make sense whether it be from a price or laws perspective. You're searching in the right area, here in the southern/middle part the laws are much friendly as well as the prices. One thing I would caution you on is the types of areas you're investing in. While low 100's seems like it's less risk because it's less out of pocket, in my experience I've found it to be the exact opposite. Cheaper properties tend to be in more challenged areas where residents where the clientele just isn't as consistent over time so there's more time, effort and energy spent chasing no payers or late payers and finding someone who takes care of the property is much farther and fewer between. Although when you do have a good renter it tends to be really good but when you get a bad one in there it's really bad. That said, I'd definitely recommend having a higher reserve fund in this type of area. A lot of my clients prefer the mid-high 100's and under 275k range because the clientele is more consistent so it makes the investment much more safe, comfortable and reliable.

I'm not a big fan of option 4 just because that's all you're getting 4.5% no matter how you look at it. When you own leveraged real estate you're getting at least a 4.5% return just on the debt the resident is servicing. As values and rents go up over time, so does your return not to mention any additional cash flow you're getting. 

I'd recommend options 2 or 3, at the end of the day it all comes down to the team you have in place and the experience that team has. There are great agents and property managers out there just like there are great turnkey operators who do everything for you in house. I've got a ton of experience working with both. At the end of the day you're only going to be as successful as that team allows you to be so I would definitely advise doing a deep dive and  visiting, if possible, who you'd be investing with and where before pulling the trigger. 

Best of luck on the investment journey, feel free to reach out if I can be of any assistance! 

@Saurabh Kukreja it all depends on what your goals are. If you are a long term buy/hold investor that's wanting to invest passively this is a great deal in today's market. While it doesn't meet the 1% rule it's in a stable, desirable area that'll perform more consistently for you over time so it's worth the tradeoff in my opinion. If you are getting a true turnkey home that hit's the 1% rule there's a very high probability you are in a more challenged area where the residents aren't as consistent over time. 

In regards to the numbers you're calculating they seem to be relatively conservative in my opinion, to be direct it's more than I use for homes that are in good condition. Feel free to reach out if I can be of any assistance, best of luck! 

@Saad D. The 1% rule is still obtainable in several markets here in the southern/middle part of the country. It'll likely put you in more challenged areas so there's higher probability for headaches but those properties that do work out, tend to do very well. 

@Charlie Krzysiak when I graduated I rented for a year then got into a single family home and house hacked it for 2 years before I got married. Personally I'd prefer a single family over a condo just because of the control aspect and HOA nuisance. I know cash flow can be challenging in Texas but if you are anywhere near break even it's a win as long as you're in a good area because values are only doing one thing over time in that DFW metro. In the long haul that appreciation is going to be far more beneficial than the cash flow difference.

@Michael Nguyen welcome to the forums! If you and your partner are in it for a long term buy and hold option I would recommend purchasing homes in your personal name then quitclaiming to an LLC. This way you're able to utilize conventional loans, each of you are allowed 10 of those. You can certainly buy the property in the name of the LLC but you'll have to use a DSCR product which will have an interest rate that's 1% higher than conventional.