Where to Focus Next?

Question

So I've finally after much research, and attending my first BP meetup....I've finally decided that my first deal will be an out-of-state turnkey. Now I'm stuck on the next step! I'm not sure if I should I focus on an area, or find reputable companies first? Maybe research more ways to finance through turnkey? I really like what I've seen from Memphis Invest, but while I wait to talk to them, I want to make sure I'm taking the appropriate action. Appreciate any guidance.

Anton Ivanov · Answer

@Jerome Daughtrey

I always advocate the following:

• Research rental markets across the country and pick 1-2 that match your real estate goals, risk tolerance and criteria.
• Look up 2-3 local turnkey providers in each of these markets and personally interview them and several investors who have worked with them in the past.
• Get pre-approved for a loan. This will give you an idea about the maximum purchase price you can afford.
• Start looking and analyzing turnkey properties. Pay specific attention to the neighborhoods and not just the homes yourself.

If possible, it's very helpful to physically visit the market yourself and meet with the people you will be working with + view some of their properties.

Tom Ott · Answer

Hello Jerome,

When looking to start on a turnkey, keep the market AND the provider in mind. You want to make sure you find a market that will give you a great ROI, and you want to make sure you go with a real turnkey provider. Some of these companies act more as "middle men." Which basically means they are agents who farm the MLS and find you a home they think is a turnkey. A true provider will own the home first and do the renovations themselves. This way you can actually hold them accountable for the work that they did.

Curt Davis · Answer

research the markets that interest you and then reach out to the providers in those markets.  In our market there are several companies for you to speak with and several things to consider as all turnkey companies are similar in general but we all have our own unique features that make us a little different. Good luck with your search.

James Wachob · Answer

@Jerome Daughtrey when you do find some areas of interest, I'd be happy to show you around

James Wachob · Answer

@Jerome Daughtrey what areas of Memphis are you considering?

Gordon Cuffe · Answer

I like the Kansas City market also. You can also find owner occupied turnkey right off the multiple listing service of the city that you choose. You can get a home inspection for any home that you make an offer on so that you feel better.

Derrick Dill · Answer

Jerome,

As an investor in California I found myself with similar decision. I house hacked (still am) and got my first duplex property here in California, then I went turnkey from there.

Your next steps are:

1. Get a lender, get pre-approved and see how much you're eligible to be financed for. This will determine how much you can afford, it's important to narrow down your price range.

2. Decide on a market. Where? Do you want cash-flow? appreciation? hybrid?

Henry J. · Answer

@Jerome Daughtrey

Hi Jerome,

What are your short/medium/long term goals?  Why did you decide to go turnkey route?  By buying out-of-state turnkey, you are looking at longer term buy-and-hold because you will likely be paying retail prices so you can't turn around and sell your rentals to make any profit.  You are also committing 20-25% down payment if you are getting a typical mortgage loan.

That said, if you are still into turnkey, definitely research a market first then providers.  Also make sure you have your finances in order so you don't become one of those tire kickers.  :)  If you have a mortgage broker already, get pre-approval so you know what price range you're qualified for.

You can find some turnkey provider info on //turnkey-reviews.com/.

Reach out if you want to chat.

Good luck.

Henry

Derrick Craig · Answer

@Jerome Daughtrey

Where there is a will there is a way, reminds me of chess figuring out your next moves. I would focus on area first them find a good reputable company or companies interview them go out to visit them and the area and choose from there.

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