Full time job, Out-of-State: Build own team or go turnkey?

[Aaron Bassett]

For those of you with full time jobs and a passive approach to REI: When you don’t have sub 50K properties within driving distance are you just going the out of state turnkey route? Or have you found success flying out somewhere for a week and building a team on your own (hopefully with a few leads from BP or elsewhere)? I am struggling with trying to contrast the increased effort/time associated with setting things up on your own (with the promise of securing more value) VS relying on a turnkey team and purchasing a property at list price. My focus is on cash flow and I see appreciation, at least in the short run, as simply a bonus. Thanks for sharing your experiences.

[Marco Santarelli]

Hi @Aaron Bassett,

Welcome to BiggerPockets!

Your question seems to be a reoccurring one -- turnkey versus do-it-yourself.

Some of the biggest benefits to truly passive turnkey investment properties are "done for you" investments with immediate cash-flow and low risk. When you set out to buy-fix-and-hold a property you are taking everything on yourself from finding the right property, in the right area, assembling your team to renovate it, putting up most (or all) of the cash to do so, and that assumes you have the experience and time required to invest in the project.

You might end up with a lower cost basis in the end, assuming everything goes well, but you take on all the risk to try and get there. Don't make the automatic assumption that it will cost you less overall doing it yourself. There are investors you start out with those intentions only to find that it cost them more than the fair market value (FMV) of the property in the end.

You are wise to focus on cash-flow instead of appreciation. That's the "glue" that holds your deal together, and equity will build over time through amortization, and any future appreciation.

If you work full time and/or rehabbing properties is completely new to you, then seriously consider working with a reputable, full-service turnkey company that can 'hold your hand' and take you step-by-step through the process.

Continued success!