For Newbies...To Turnkey or Not to Turnkey

[Chad Hotovec]

I need some advice. After making the decision to get off the sidelines and start investing I've hit the MLS pretty hard looking for the deals. I'm a numbers guy. As you're probably thinking, my unfamiliarity with the rental market does make me nervous. I've been listening to the BP Podcasts for the past year and i heard a common theme of buying off the MLS to add value through rehab.

I'm fortunate enough to have some money set aside to allow me to pay the 20% down, since i'm way past the FHA / live in option. But i don't think i should start my first property with that kind of goals to complete on my own. My REI goal is to create passive income, while keeping my day job, to secure a ~20 portfolio in the next 10 years. I plan to buy in B Class neighborhoods in the KC market, at least to start. I plan to re-invest my profits to help me purchase multiple houses a year to get there.

My question: I see a lot of different paths to go down, and since i'm looking to be hands off and not manage my properties, do Turnkey's make sense?  Anyone have advice, good or bad, for using a turnkey company?

Thanks in advance!

[James Wise]

Don't over complicate things. You live in a low barrier to entry market. Have a good agent show you some properties in your area. Target homes that are priced well and in decent shape. 

No need to do a gut job renovation. A lot of the value ad mumbo jumbo people discuss is really overhyped. The real key to long term wealth through rental properties is principle pay down. Your tenants will buy your houses for you, very simple but often completely overlooked and underappreciated.