Turnkey as first purchase? Then what?

Question

Hi,

I'm just starting out and trying to get a first investment property. Looked through the site and read a lot of discussions, finally decided that maybe a out of state turnkey property will be appropriate as the first investment.

However, I also have the question if I put 20% down and get a conventional loan for the purchase, how will I be able to get a second property, say, 6 months or a year later? Keep saving with the income from my day job? or are there anything else I can do with the turnkey property that can help fund my future purchase(s)?

The area I'm looking at is Kansas City, MO, which I believe has seen some appreciation over the past few years, but mostly for properties in A neighborhoods. I would be investing in B neighborhoods so I think I will need to rule out appreciation for now?

Thanks,

Young

Ian Reeves · Answer

@Young Hwang - The only way to get things to grow really quickly is to create lots of equity in every deal or too generate income by some other means. As @Chris T. said, the BRRRR strategy is great, but it would be very difficult to do remotely unless you partnered with someone in the area. Our strategy is 100% value add, we do ~1 flip for every two BRRR's. We have been able to grow our portfolio very fast by doing this, but it also required us to build a serious business. If your area is too expensive and you want to grow fast, you are going to have to figure out a way to inject money into the machine :). Keep in mind real estate is not the only way to generate passive income, or additional streams of income outside of your normal job.

Tom Ott · Answer

Good luck with your TK investment. I would check out:

What to Ask When Working With a Turnkey Provider

and

The Best Types of Markets for Profitable Turnkey Properties

To get you started!

Young Hwang · Answer

@Ian Reeves @Caleb Heimsoth Thanks for your suggestions, I will keep searching...

Young Hwang · Answer

Thanks for the info @Tom Ott

@Chris T. I see what you mean. Maybe I should search for wholesalers in my area (NYC)...

Chris T. · Answer

@Young Hwang

That's the biggest question. It takes a while to save that 20% down.

Search for BRRRR strategies on BP. If you can house hack as well, that will increase the velocity of your money instead of buying a TK.

Don't count on appreciation if you buy in B/C areas, unless you know there's going to be development coming with a possible appreciation.

Turnkey as first purchase? Then what?

Turnkey as first purchase? Then what?

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