Out of State investing 101. Turnkey or bust?

[Mike Schelske]

Hello everyone,

I have done a little research on out of state investing, turnkey seems to be the easiest and simplest option. I have heard there is another option that is similar to turnkey but safer, but I haven't gotten specifics. If I were to pursue turnkey or some other out of state investing option I was hoping to get an idea of indicators and strategies for investing out of state.

1. How to find and identify good property mangers, or PM options?

2. How to find good turnkey providers?

3. Other options to turnkey, I work full time and attend college.

4. Free or cheap sources for research of the properties.

I have read a few articles that have said that turnkeys are bad because of poor location, or false information, the renovation wasn't done properly. I have also read that the returns aren't as advertised, that they turnkey is slow to grow be an effective investment. 

[Brandon Leong]

Hey, Mike!

Just closed on my first turnkey property, it was a long and arduous journey, but I finally got here!

1.
If you are using a turnkey provider, most likely they are going to manage it in-house or have a trusted company do it for you. Otherwise, your best bet is to ask fellow landlords about who they use for property management.

2.
To find a good turnkey provider is the biggest trick and can be a difficult process, not that many online resources. I found that the best is just to Google for turnkey providers in the area you want to buy. Most turnkey providers won't give you their list of inventory until you give them a call either. After that, I personally think that it is best to actually fly over and meet them in person to try to get a feel of what they are all about. This also shows that you are serious about buying!

3.
Don't know about other options (for out of state investments), if you find out, shoot me a PM!

4.
Depends on what research you are looking for. Google is always a good and all the big real estate websites, Trulia, Zillow etc can be a good source of information. My first stop when looking at a specific property is to look at the Trulia crime map, it's an easy way to rule something out.

Everywhere you go in the real-estate business it seems that there are horror stories. The trick is just doing stringent due diligence, so much so that you are comfortable with whatever you are investing in. There will always be an element of risk and nothing is a sure bet. This is very difficult to get over since real-estate is such a 'trust' business. You have to trust many people, from contractors to lenders to inspectors. As a general rule, I think you should meet all these people in person. But that's a personal preference, I have heard lots of people who don't do that.

Anyway, good luck on your journey!