First property dilemma

[Pinank Parikh]

Hi All,

I am just starting my journey in the real

Estate investment. I have been doing some research, talking to folks and attending some webinars. There is just wealth of material and view points and it has been hard to narrow down on a property.

I am particularly interested in a turnkey property and there are a ton of providers in that space. The dilemma has been what if property turn out to be bad and require significant repairs down the road. On paper everything looks good. I look at RoofStock everyday.

With that dilemma, it just occurred to me that why not just invest in a new development. Builder is likely to have done some research on the prospects of that market and neighborhood. It may not be a significant cash flow on day 1 but appreciation can be good. Plus I don’t have to worry about any repairs for few years as it comes with builder and appliance warranties.

What am I missing here?

P.S I live in Sellersville, PA but open to out of state turnkey property as well.

Thanks

Pinank

[Alex Deacon]

@Pinank Parikh most turnkey providers dont provide a good product, over promise and under deliver. I buy properties here in Pittsburgh and I hold onto them. Think about how hot the market is right now nationwide. Think about how hard it is to find a good deal with it being a sellers market. Now think about how can these turnkey providers find a good deal then make their profit then sell it to you so you can make a respectable profit. Its way harder then it looks. All I am saying is be very careful and make sure you run worst case and best case scenarios before you pull the trigger. Account for all costs and expect lower rent then what the Turnkey provider is promising. 

[Jacob McCann]

@Pinank Parikh I second what alex said, in this HOT market everything is selling for top dollar. Turnkey providers are running a business just like wholesalers often exaggerate the numbers turnkey providers often do the same. If you do decide to go turnkey make sure the numbers make sense, and always get second and third opinions. Best of luck!

[Aj Parikh]

@Pinank Parikh HI Pinank, I recently closed on a turnkey property with Martel Turnkey in Cleveland, OH in Oct 2020. I have shared my experience on this blog below and would be happy to answer any questions you may have. I also purchased a property through Roofstock in Memphis, TN and that has been cash flowing as well. 

https://www.biggerpockets.com/...

[Mike McCarthy]

@Pinank Parikh new construction is always an option, but make sure the numbers work. Most RE investors don’t bank on appreciation as it’s too much of a gamble. Run your cash flow numbers and if you’re making money there, then appreciation is just sprinkles on the cake.

[Andrew Park]

@Aj Parikh how is your management company in Memphis?

[Marcus Geiser]

@Pinank Parikh Pursuing a JV deal with someone like myself who can manage the work load of a flip? Then flip to yourself and use the funds to repeat? It is a solution that provides a turn key with a little extra work and the reward of the equity. If your looking in Pittsburgh I'd be glad to help.

[Aj Parikh]

@Andrew Park I am working with @Caleb Parr from Renshaw Property Management and the services have been amazing. There was an on-boarding call after I closed on the property and they walked me through the rent receiving process, maintenance requests, regular inspections and any other bill payments on behalf of the owner. They have been the MVP of my investment team. 

[Andrew Park]

@Aj Parikh Good deal, they're good people over there. Glad everything is running smoothly!

[Caleb Parr]

@Aj Parikh - Thank you for the shout out! Can't wait to get started on your next investment property in Memphis!

[Ron S.]

I may be the odd one out, but I prefer older properties.  I get the sense that they were built with better quality and materials, and if they've survived 50+ years without any major structural issues, they'll probably last at least another 50+ years while I own them.

[Aj Parikh]

@Ron S. There might be some truth to that. My property with Roofstock was built in 1962 and I haven't had any issues so far.