Looking to Start with Turn-Key Investing

[Eric Sender]

Hi Everyone,

In extension to the thread I made here Finding my first Deal, I am realizing that Turnkey may be the best way for me to start off. As of now --

• I want to keep my down/up-front payment in the $20-25k range
• I pretty much need to be out of state because I live in CA and it seems there is nothing profitable at the lower end. 
  • I hear Kansas City is a great option
• Looking to build a team
• I did read this article The Dirty Truth About Turn-Key Real Estate Investments so I acknowledge there is more profit to be made by manually following something like the BRRRR method, however my first go it could be too much. I do work full time after-all.

I got a few college requests in my last couple posts from (I believe) Real Estate firms, but It'd be great to chat with someone a bit about how the details of would work. In essence, I am hoping to form a team with a property manager, lender, etc. 

As an aside, does anyone recommend I actually start off with BRRRR from the get-go? I'm feel I understand the theory behind it and it sounds like an excellent way to make money while revamping homes and adding value to a neighborhood, however I really don't have a network to make the process fluid to any degree.

[Jenny Bayless]

@Eric Sender

We started off investing in turn keys.  We have bought a total of 6 of them, but are actually in the process of selling or have sold 4 of those.  

I feel like buying those properties was a great way to get started in real estate investing, and I equate it to 'training wheels' in a sense.  A reputable turnkey provider is going to be supporting you along the way and won't let you fall.  However, you aren't going to be able to ride super fast with training wheels on!  

We started realizing that by buying under market value, rehabbing ourselves (and by that, I mean hiring it out), and then PMing ourselves, that we were able to add value instantly. We jumped into our first local deal as a BRRR. It was successful, but I have to give credit to the fact that the market jumped up while we happened to be doing our rehab!

I personally wouldn't recommend jumping right into a BRRR on your first deal, because I think it is important to get a safe taste for real estate investing. A turnkey rental lets you understand the full process of reviewing a deal, going through the loan process, inspection process, and then seeing month to month how revenues and expenses play out. It is a really safe way to learn (assuming you pick the right provider). However, we would not buy anymore turn keys at this stage, as we prefer the added value of going about it on our own.

Jenny