Getting ready for REI in 2020

[Pat Patel]

Hello. I'm currently in retail business and own 5 cell phone stores. I have been doing research in RE investments and would like to start in early 2020. I'm very busy running the businesses and handling day to day duties. BRRRR strategy isn't possible with my current situation but I would like to start investing. What are your thoughts on Turn key properties? I know I'll pay more for a turn key but cash flow is what I'm after for the next 3-5 years. Long term goal is 15-25 rentals, steady cash flow and eventually get out of the retail stores. I'm also employing the HELOC strategy to pay off my primary residence (approx. 30 months to achieve this). This will leave me with decent equity that I can use for down payment for investment. Am I off my rocker buying turnkey properties? Any advice wouldmbe appreciated. Thanks

[James Wise]

Originally posted by @Pat Patel:

Hello. I'm currently in retail business and own 5 cell phone stores. I have been doing research in RE investments and would like to start in early 2020. I'm very busy running the businesses and handling day to day duties. BRRRR strategy isn't possible with my current situation but I would like to start investing. What are your thoughts on Turn key properties? I know I'll pay more for a turn key but cash flow is what I'm after for the next 3-5 years. Long term goal is 15-25 rentals, steady cash flow and eventually get out of the retail stores. I'm also employing the HELOC strategy to pay off my primary residence (approx. 30 months to achieve this). This will leave me with decent equity that I can use for down payment for investment. Am I off my rocker buying turnkey properties? Any advice wouldmbe appreciated. Thanks

Whenever you are buying a turnkey property out of state you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.