Turn Key Lessons Learned

[Sandra Roddy]

For those folks who have gone the turn key route, what were the determining factors that guided you to a particular market? Also, were there any lessons learned that you would like to share with a semi-novice investor?

Currently, I find myself looking to expand my small portfolio. All of my properties are single family homes, located within locations I have resided in, and all were built within the past few decades. Yet due to appreciation, it is time to start looking elsewhere and this can be a scary thought at times.

My research has lead me to locations that are far away from my stomping grounds. At the top of my criteria: reasonable ROI, expected appreciation and economic growth. Additionally, I prefer newer development (1990 and newer). So far, I have considered Dallas, Oklahoma City and Indianapolis.

To those brave souls, who have gone the turn key route, how was the experience? Any advice would be greatly appreciated!

[Mike D'Arrigo]

Hi @Sandra Roddy , of the 3 criteria you listed, I would put economic growth or strength at the top. It will drive the other factors. The 3 top things to look for in a market in my opinion are: 1. Population trends, 2. Income growth and 3. Price to rent ratio's. Of course, there are a lot of other things to look at put I see these as the core fundamentals. All 3 of the markets you're looking at are good for different reasons. From a pure cash flow and ROI basis, Indianapolis is the best in my opinion. Dallas and Oklahoma City both have very strong and healthy economies but the price/rent ratios are not as good and Dallas has high operating costs (taxes and insurance) which will compact your ROI. I've been involved with turn keys in Indianapolis for quite awhile and know the market very well. I'm happy to share my thoughts with you. I also have a report on how to choose a market and one on how to buy how of state that I can send you if you'd like.