Best areas for turnkey properties?

[Francis Pena]

Hello everyone,

I have been saving up some money and currently have about 150k that I would like to invest in a few turnkey properties, and was wondering what areas do members suggest. I was told Flint, MI with a good property manager is worth the invenvesment. Does anyone have experience with this area?

Thanks in advance

Francis

[Brian Ploszay]

I have been a vocal critic of turnkey properties on B.P.   Flint Michigan is a good example of a place that you should exercise extreme caution in investing.   I have nothing against the city nor its people;  I have been there.   Flint is a shrinking and deindustrializing city.   The area has lost about 50 percent of its population since 1970.  What this means is the demand for housing is shrinking.  There is a lot of surplus housing, and not surprising housing stock gets torn down.  And pricing is low.  

The demographics are working against you, and there will be low appreciation. These areas often do deliver a superior cash flow yield, predicated if the investment is performing. If you choose to invest in C properties in towns like this, I would say you need to understand that they are risky. It is successfully done, but usually by hands-on, local operators. Markets like this have a lot of distressed real estate, so operators can buy properties cheaply, repair/rehab and then rent. As a turnkey buyer, you are not capturing this, because you will be paying a more full price. Make sure you get an independent valuation of what the property might sell for on the local MLS, if it was vacant. Look at all the comps, including the similar distressed properties in the immediate area.

You might want to look for properties in Eastern Pennsylvania towns instead.   They are closer to where you live.   It's cheaper than NJ.