All Forum Posts by: Tony Xu

This sounds awesome. Were you thinking of keeping this local or just anyone? 

Also, I would recommend that we also create a group chat/instant message area, that people can just quickly glance on their phones and maybe just run some quick questions. Being in tech, I would definitely recommend slack for this, as its for pc, macs, and mobile devices, and I use it everyday for work. Also, if we want voice chat integrated in, we could use discord. Although it was designed for being a quick way to create chatrooms for video games, I think it would work well for this case.

Let me know what you think or end up doing, and I could set up a group for us.

I definitely understand your points, that on an older house like this, I should expect problems. However, the reason why I chose turnkey was for a freshly rehabbed house, and this just didn't feel like the case to me. Maybe my expectations were just off initially. Also, I think if this was a killer deal, I would have maybe kept going with it, but I was only getting about 10% Cash on Cash, which doesn't feel worth it for this amount of risk.

I think especially for my first property, this is not something that I want to deal with, even if everything got fixed. For my risk tolerance right now, I think I'm going to stick with a higher grade house, that's much newer and in better condition, even if the cash flow is lower. 

 Lol, story of my life. I think its why 90% of OOS turnkey investors are from California.

I've had similar experiences as @Doug Woodville, most properties in the ~100k range are cash flowing for about $200 a month. Thats taking in to account 10% for capex, 10% repairs, 8% vacancy, etc. Cash on Cash is just over 10%. These properties are usually in B - C+ neighborhoods. 

I think the reason why a lot of people post they got better deals through turnkey is that they bought it 3-4 years ago, when we were still recovering from the recession. I think it's a way harder market now to find deals like that.

@Lee Ripma

So did you just work with an agent in acquiring these properties? How did you go about researching which areas you wanted to buy in? Is there anything in particular that you really look for, things like schools, crime, etc

 It's renting for $950. Why do you say that anything below 900 is worrisome? 

Yeah, I think I have decided to walk away from the property, thank you all for the advice! 

@Brian Ploszay

I don't think buying property in the Bay area is a great idea right now. Right now prices are stabilized and is even slightly declining. It is impossible to cash flow here and every house gets multiple offers in the first 24 hours. Also, the cost of entry is too high for my taste, it really makes no sense.

The reason why I picked KC is because I see a lot of posts here about KC being a great cashflow market. From all the readings here on BP, as well as some of the books I've read, cash flow seems like the better and more consistent way to build wealth vs going for appreciation. I have thought about investing in markets experiencing crazy growth, however, I haven't been able to find a market that can also produce decent cash flow.

It says you are from Chicago, do you mostly invest in the Chicago area?

Hello,

So I'm in the process of closing on my first turnkey property and just got my home inspection report back. It only listed 1 major issue but a lot of maintenance items, I am not sure what is expected/not expected since it is an older house, about 75 years. However, since it is turnkey, it did get recently rehabbed. So if someone could help me out and let me know if the things below are a major concern, that would be awesome!

Major

• Insufficient number of HVAC supply vents in family room. A room with 3 exterior walls should have at least 2 supply vents. Currently only 1 supply vent installed on South wall. Recommend hiring professional HVAC contractor to evaluate and correct to provide necessary heat to space during winter months. 

Maintenance

• Landscaping is flat and slopes toward foundation around home. This is a typical condition found in many homes. Recommend sloping grading away from home 1" per foot to avoid grading erosion, foundation seepage and possible foundation movement (85-90% of all foundation moisture problems can be avoided with proper grading and downspout extensions). None visible during time of inspection.
• Open space where gas and AC lines enter siding. Recommend sealing to avoid possible moisture damage. 
• Termite damage at floor joist on West side of basement. No previous treatment is visible and none is disclosed.
•  Plumbing supply piping is made of galvanized steel. Over time this will become clogged and corroded. '
• Rust and visible at circuit breakers. This is likely caused by corrosion. 
• No roof vents installed.  

• Missing smoke detectors in Hallway and basement
• no CO detectors
• Drip tube is missing at water heater

•  Loose siding on South side of home. 

• Unpainted window sill on North side of home. 
  

• No window well cover.
  

• Downspouts missing elbows.

• No furnace filter installed. 

•  No cold water shutoff valve installed above water heater. 

Thank you!

@Karen Lin

Hey, welcome to BP. I'm actually in the same situation as well, fairly new, work in SF, and invest out of state for buy and hold. I am actually in the middle of closing my first deal! I mostly networked with people on bigger pockets and got recommendations for different markets, companies to work with, etc. Feel free to shoot me a pm if you would like to know more or want to grab a coffee sometimes in SF.