what do you think about turnkey properties?

[Yippi Jim]

Hi guys,

I am very new to RE. Currently I am working in California and think about investing out-of-state since the housing price is too high in my area. Turn-key seems the most hassle-free option and works well for me as a newbie and given this covid situation and stay-in-shelter. I found some people in the BP have turnkey business themselves and the deals look good, like a $80k house brings $280/mo cash flow as the report says.

What do you think of the deals like this? How realistic are the numbers in the report if you have experience buying the deals from the turn-key companies? What factors do you consider for a turn-key deal? Do I still need to find a real estate agent? What companies do you get your turn-key deals from? Will you recommend a newbie to do turn-key or other things?

Thanks

[Will Fraser]

Hi @Yippi Jim!  Turnkey can be a great resource for investors, both in state and out of state.  The key value proposition of a turnkey provider is simplicity.  You buy, it works.  Viola!  

Now that being said, the key things to consider is how does this purchase fit into your overall real estate investing goals?   Do you want to buy four properties that rent for $1,000/month, pay them down ASAP, and have the $4k coming in every month from your free-and-clear properties?  That's a cool play!  Turnkey products from a quality provider could be a perfect route to that!

Do you want to amass a sizeable portfolio and pay it down only as you have to?  Cool plays to be made with this, too!  Turnkey could be a good way to get started, but IMO you'll want to move away from it as soon as possible unless you have a very high income job and a relatively low cost of living (i.e. you have a high savings rate) -- in this case you might be able to plug away for a decade, saving 80-90% of your income and plowing it into turnkey and still amass quite the stable of properties!