All Forum Posts by: Todd Dexheimer

Ask the seller to do a seller carry back of 10% or better yet ask him/her to finance the purchase for you with 5-10% down for 2-3 years. For private money talk with everyone you know. I'd be surprised if no one in your company, church, friends, family, acquaintance network wouldn't have interest. Even if you pool a ground together to raise the funds and partner with you. Usually the sponsor(you) would get a 20-30% ownership and all the money people would split the remaining 70-80% based on their monetary equity. 

@Vanessa Morrison if it is a 506c offering then you can publicly offer it. I would put it all over social media, you could try to crowdfund it, email blast it to those you know, post it on the BP market place (I think if you are a pro you can do that). 

I would suggest getting all the prep work done right now. Line up contractors to start (I like to schedule them for 3-5 days after I am scheduled to close, this allows a buffer. You can always call them the day before closing and say it will be ready to start in 2 days). I would also have my interior designer in the house right now picking out colors, cabinet styles, flooring choices, plumbing fixtures, lighting, etc. Then get the floors measured for tile, carpet, etc if you are ordering the material, measure windows, doors, count light fixtures, plumbing, etc. I get a whole list together of all the materials I will need and at what phase they should be ordered. I would count on 3 weeks for windows, so order that asap. Also, granite and cabinets can take 2-3 weeks. Contractors can also be 2-3+ weeks out, so if you are running the job you will want to be diligent on scheduling. 

Great job! Congratulations and I wish you the best of luck on operations. Here's to making you and your investors a boatload of money!

2 extremely important things to think about if you're going turn key. First is the turnkey company. Make sure you do a lot of research on the company and get a ton of referrals. I would make sure you're able to get conversations with the management team and with the owner of the company. I would also make sure  that you talk with numerous investors about the company. Bigger pockets is a great source once you find a company. 

 Next I would do a lot of research on the market itself. If you're going to invest in the Midwest where a lot of turnkey properties are located you need to be sure that the population is growing or at least stable and not projected to decline. You also need to understand the exact location that you are investing in. The last thing you want to do is buy turnkey properties in a poor location with a poor turnkey company.

The last thing – I guess third is that you want to make sure that the property you are purchasing is sellable in the future. I would avoid weird houses with odd layouts or features that just are not going to be desirable. 

Tell him no thank you. Is it necessary for you to use his space? If not, why pay? 

I have owned in bad areas and would not suggest it from my experience. House was cheap, so it cash flowed $500+/month until they stopped paying. Then I evicted the tenant and had to spend a month and $5k-$10k renovating the place. Take that times 4 tenants and you get no cash flow. The good thing is I sold it for $25k more than what I paid after all expenses. 

Personally if I was in your shoes, I would buy a deal if the numbers make sense with you not living in it. You need to calculate the income then take into consideration vacancy (I use 10%), taxes, insurance, maintenance (I use 15% of gross rent), utilities landlord pays, city licensing fees, city inspection fees, management fee (you may want to give that up someday), replacement reserve, lawn and snow care, leasing fees. 

If it cash flows, then buy it. I have been studying markets for the past few years and I am seeing 4-7 years left before a crash. I may be wrong, but if you are cash flowing and ok keeping it 10 year, does it matter much? 

@Dan H. many of your assumptions are flat out wrong. I've been doing this for a long time and I am a licensed General Contractor, so I know my numbers - and I don't do the work myself. Your $29/month you quote is not even right it adds up to $22/month. Your foundation issue is unfortunate, but could have been avoided if you inspected your property properly, which tells me enough and why you need to budget as much as you do. $3700/mo for repairs and reserve is good enough for my deals. Many other post I have posted the numbers I use and most often get told that my numbers are way too conservative. 

@Dan H. what is a wall mount furnace? We don't have those here. Also, when replacing a furnace you don't replace the ductwork. Most of it is in the walls and ceilings. I can get a high efficiency furnace for $1800. I don't put in central Air in my houses. Also, most kitchens will last 50+ years if you replace counter tops. 

I have no issues with you budgeting $200/month or $1000/month on reserves. My properties work out well with what I budget because they are very thoroughly renovated and cash flow $400+/month (that includes roughly $2500/year allowance for maintenance and $1200 for reserves). I would rather see investors conservative like you than the opposite