Best Turn Key Companies?

Question

Hello everyone, I work as a traveling professional and want to invest in real estate. My life is pretty chaotic with moving around, so I was considering turnkey investing.

Is this a good idea for my situation, or are there better ways to invest out of state? All while doing my own due diligence of course.

I heard of plenty of horror stories with turnkey investing, and dont want to get burned. Currently I am getting in touch with a few companies that I have heard good things about, including Rent to Retirement which seems to have good feedback on BP.

Does anyone have feedback on Rent to Retirement? Or are there better turnkey companies or paths to invest out of state? Since I'm so busy I dont want to add a ton of extra work after the DD and upfront setup of the property.

Zach Lemaster · Answer

@Alex Gerondale

Welcome!  And thank you for the interest in RTR.  TK is a great way for someone to easily get started, to easily scale & diversify beyond what you are currently investing in, and it's a great way to easily invest in a new market where the returns may be more attractive than your local market with a team that is already established.  We have many people that invest with us to get their feet wet in out of state investing & then go on to do their own investing, but we also have many people that continue to solely invest with us long term as they like the idea of being more passive in their REI.  All up to you & what fits your goals.  The best piece of advice I can give you is to do something.  Don't fall into the analysis paralysis as so many do here.  You grow and learn by actually investing.  I definitely recommend connecting with our team to answer your specific questions & see if this is a path that fits your goals.  Right now is a unique time where we have a fair amount of new construction that is being offered below market value & cash flows well.  This would be a scenario where you could buy TK below market value, contrary to what most people think of when they hear TK.  All depends on the market cycle and location though.  We also have some unique investor portfolio loan options currently that are allowing for as low as 5% down on new construction.  I'm guessing this option will be at capacity within a month or two, but something worth looking into.  Hope this all helps.  We look forward to hopefully connecting with you soon.

Here are some other threads about RTR and TK in general that might help your research:

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/1116050-a-huge-win-with-cori-from-rent-to-retirement

https://www.biggerpockets.com/forums/44/topics/1058814-first-time-with-new-construction-cape-coral-fl?highlight_post=6055029&page=1

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/forums/12/topics/1122318-quality-turnkey-companies?highlight_post=6413855&page=1

https://www.biggerpockets.com/co/RentToRetirement

https://www.biggerpockets.com/forums/92/topics/929410-rent-to-retirement-updates?highlight_post=5508807&page=1#p5508807

https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

https://www.biggerpockets.com/forums/311/topics/915728-experience-with-rent-to-retirement-turnkey?page=1#p5345200

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster?highlight_post=6192149&page=4&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification_V2&utm_channel=28426&utm_content=Marketing

https://www.biggerpockets.com/forums/67/topics/952977-turnkey-in-indianapolis-through-rtr-case-study

https://www.biggerpockets.com/forums/12/topics/997350-lessons-learned-from-buying-my-first-rental-property?highlight_post=5748036&page=1#p5748036

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/forums/48/topics/874096-reviews-on-r2r-and-nch?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5123754

https://www.biggerpockets.com/forums/311/topics/883772-turnkey-investing-renttoretirement-feedback-reviews?highlight_post=5171720&page=1#p5171720

https://www.biggerpockets.com/forums/92/topics/950188-rent-to-retirement?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5535505

https://www.biggerpockets.com/users/ZacharyCole/references

Alex Gerondale · Answer

Thanks for the information Zach. I've listened to most of your YouTube videos and love your company's concept. I also found tardus wealth strategies through you guys. I guess a follow up question I would have for you is if I should start working through tardus first and then buy rental properties through you guys afterwards. I currently have 32k total in savings with 28k in a Roth IRA and 4k in a 401k. I save 3k a month after expenses so I could buy a property through you guys in 3-4 months. Or I could drop 5k on tardus for their coaching and build up my Snowball. My only problem with tardus after talking to them was that they could only get me 5k in true passive income after 8 years of flipping (passive income is withdrawn from investments at a rate that won't diminish the Snowball). In truth I'm not sure which is faster. Buying real estate first and letting it appreciate with passive income, and then getting a HELOC for more properties, or using tardus and waiting 5 years to buy even one property after my Snowball accumulates, and then getting more properties every 3-4 month afterwards. Part of me thinks just saving for down-payments in real estate and buying through you guys makes more sense, but not 100% sure. I won't hold you liable for any opinion you may have, just looking for honest advice. I told tardus I won't commit to then for at least a week so I could reflect and determine if this is the best course of action.

Danny Jimenez · Answer

Congrats on making the decision to get on the REI train! Rent to retirement has a pretty good track history from what I have heard (I have not used them personally) You could do turnkey investing or another option you have is you can be a passive investor on deals and earn interest on your money instead of dealing with the potential headache of tenants and whatnot.Another thing to mention is that because they do all of the leg work, you won't get as good spreads since you're not putting the deal together but to circle back on your main point, you are looking for something more passive so turnkey / private lender would make sense for you!Pros and cons with both!

Zach Lemaster · Answer

@Alex Gerondale I'm happy to connect.  Feel free to reach out whenever you are ready.  We all have to start somewhere.  I think the OH market would be a great starting point, and you likely have enough capital to purchase a property now based on the lower price points.  You could also use the same portfolio lender to put 5% down on an OH property (or whatever amount down you would like to).  So there are many options for you to take action now.  Just depends on what your goals are, and what is going to get you closer to them!

Zach Austin · Answer

@Alex Gerondale

Hello Alex- would love to hope on a call and talk specifics about this deal.

-Zach

Alex Gerondale · Answer

Thank you Zach. I definitely understand where you're coming from when you talk about net-worth and taxes. I myself chose to work as a traveling physical therapist to have tax free benefits on my per diem. And I love the concept of lowering your taxes with depreciation on RE.

First let me say I don't want to waste your time. It's a concrete commitment on my part to do buisness with your company. Both because of your reputation online and because you take the time to talk to a nobody like me. It speaks to your character.

I guess my real goal is to figure out how to scale as fast as possible with your company. As you often say on YouTube, one door alone raises your risk. It's best to have as many doors as possible to lower any potential complications (tenant not paying, maintain, ect.)

As of right now I can barely buy one rental property, and that's if I completely wipe out my savings. Which is why I would need another few months to save for door one.

I plan to talk to tardus on Monday. If they can work my plan to buy 1-2 rental properties a year starting in the next nine months I'll go with them. If not, I'll save and talk to Lars Kappler in a few months time. We were introduced a week ago and he has already pointed me towards your recommended lenders. So far he has been a great help.

It's not ideal that I can't jump into RE right away, which is why tardus seemed like a good way to accelerate things. Personally I hate waiting and sitting around to take action, but I know in my head I also have to meet certain conditions for things to make sense for a deal.

I thought about your new construction housing in Florida with the 5% down financing, but I really wanted to start somewhere without hurricanes. My grandfather has gotten his house destroyed twice in the last decade or so living in Tampa and later in Panama City Beach. Guess the Florida market makes me a little gun shy, which is why I was hoping for the OH or ID Markets.

Thanks again for taking the time to share your thoughts. Especially when you didn't have to with how busy you are. It gave me clarity on my next steps. I'll be sure to reach out in the next 3-9 months depending on what tardus says.

Zach Lemaster · Answer

@Alex Gerondale

Thank you for the kind words.  I'm glad to hear you've found all our educational content beneficial!  We really put a lot into presenting topics and interviewing guests that we feel will benefit our community.  This is one example of interviewing an interesting concept that most have not thought about yet.  Feel free to shoot me a message if you would like to jump on a call sometime.  I am busy, but never too busy to find time to speak with someone eager to get started in real estate investing.  I remember what those days were like.  All I ask is that you take action as it wears me out to spend time passing advice to people when they end up never acting on it.  To answer you question as straight forward as possible, if you have funds to buy a rental property, you 100% should do that!  Tardsus is an interesting concept for people that want to take out credit lines to invest in short term notes (2-3 years), pay the note off sooner, and then repeat.  It does not take a lot of capital to get started and you can start seeing some returns rather quickly.  However, you need to fully understand how real estate builds true wealth over time and how the tax benefits work of real estate investing.  When you combine cash flow, depreciation, leverage, appreciation, etc., you are growing your net worth with an asset in addition to cash flow.  An asset that at some point in the future you will be able to trade up to future properties, sell for a large amount, pass to future generations, etc.  So I encourage you to educate yourself to look beyond just creating cash flow.  It's interesting to me because most new investors come in only thinking about cash flow because it's easy for them to apply a simply math equation of "if I earn x amount of dollars a month from x amount of properties or investments, I can retire by the time I'm X amount of years."  They never talk about net worth growth investing in assets.  I'm guessing because they don't really understand how wealth is built in things like real estate.  On the contrary, when you speak to people who have created tremendous wealth in real estate, they never focus on cash flow.  They talk about things like appreciation, tax benefits, accelerated tax benefits/depreciation, leverage, etc.  That is how a true asset builds wealth for you over time.  So I encourage you to make sure you fully understand the short and long term evaluation of anything you invest in.

Now, if you wanted a different answer about how you could do both as a more aggressive strategy, here it is.  You could put your money down on a rental property and then use a LOC to invest in the program.  Alternatively you could also put less down on a rental property with a portfolio lender that allows all the way down to 5% (depending on your qualification criteria) to invest earlier and have more capital.  Just make sure you understand the loan and the cash flow scenario.

Main point in all of this: Nothing is going to beat real estate long term to create wealth predictably (so accept that), fully understand anything you invest in, be creative to know how you can do more than an either / or scenario, and ultimately take action.  The worst thing you could do is nothing.  Good luck!

To your success,

Zach!

Danny Jimenez · Answer

It would be equity on PP which would also give you less cash flow.But thats the trade off you get for purchasing it turnkey vs doing ALL the legwork of finding the deal, managing the rehab, setting up the tenant.

Best Turn Key Companies?

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