Highly Recommended MFH Turn Key Providers?

Question

Hi All,

As I continue to build my strategy for investment, I wanted to focus in on potentially investing OOS in MFHs. I understand the largest determining factor of my success will be the development of a strong team. Can you guys recommend any turn key companies that do MFHs and what market they operate in?

Hoping to source some personal recommendations here :)

Thanks!

Todd Dexheimer · Answer

Check out in the forums section "Biggest Mistake was to do out of state turnkey investing." You can find it in the trending now section. I like OOS investing, but not in turnkey rentals by turn key companies. I don't think you get good profit. I would suggest doing the hard work yourself by finding a value add property that you can get some instant equity in and then with a management company putting in place a system to create the cash flow and returns you desire. I also strongly suggest buying 20+ unit building out of state. I have duplexes up to 22 units and the 22 unit is the easiest to operate and creates the best returns. I am buying an 84 unit soon and this one will return my investors the most out of all purchases.

My suggestion is if you are looking for turnkey to be passive, then be completely passive and invest in a syndication or crowdfund. I think your returns will be as good, if not better, with very little hassle.

Jay Hinrichs · Answer

@Marcin Moscicki  sounds like a relationship with a top quality commercial broker would be in Order then.

Jay Hinrichs · Answer

if your an accredited investor the syndication approach is one that is quite popular.. and of course those deals the sponsor frankly is more important than the asset most of the time.

a poor operator can ruin a good project a great operator can save a struggly project or one that has some bumps in the road.

crowdfunding is an option one thing though that I don't like about crowdfunding at least on smaller debt deals is there is a huge heard mentality and the debt deals once posted sometimes are subscribed in 30 minutes.. no way anyone can do due diligence on those.. its like throwing darts at a board..

If you don't want to take the risk of having someone manage the deal for you.. and being in partnership with a bunch of people you don't know never met and to unwind would be expensive..

then just find a really good commercial broker and have them find you a property that a developer has bought rehabbed and is reselling.. no big mystery to it.. a great commercial broker can be a lifelong contact for you and make you a ton of money.

this assumes you have the wherewhithal to buy these on your own of course..

Jay Hinrichs · Answer

@Marcin Moscicki  you have to pick a market then pick a broker in said market.. I have brokered a few multis in Portland in my day  an 80 unit  and a hand full of smaller one's over the years.. but its not my main gig by any means..

you will want your

POF  all lined up

and your financing..

as well before you go shopping you won't get far with out those things up front.

Marcin Moscicki · Answer

@Jay Hinrichs Do you have any recommendations on any? Happy to connect offline as well if that is something you are open to in order to learn more.

Marcin Moscicki · Answer

@David Thompson thanks for the information, appreciate the tips you listed out in your blog posting! I think the syndication approach would make sense for my situation at some point, however for the time being I think going OOS on some MFH would be a nice way to diversify and get my feet wet

@Jay Hinrichs not at the accredited investor levels just yet, but close, so I don't think the syndication option would be possible for me at the moment

David Thompson · Answer

Hi Marcin,

Out of state investing is an important component of geographic diversification and syndication can be an ideal way of achieving that from a passive investor perspective.  Essentially partnering with others who have the experience and knowledge of their market they are investing in and you help provide the funding as a limited partner.  You can also learn a lot by being an investor in a syndication if you have intention.

DIY investing is great and can still be part of your investment approach.  I call this the hybrid approach, maybe investing locally in deals for your active spirit if time, skills and interest are there while balancing more difficult DIY projects out side of you area w/passive focus in niche areas like large scale value add apartment investing, mobile home parks and self storage for instance.  Couple blogs on MF and vetting sponsors.

https://www.biggerpockets.com/blogs/9145/53820-why...

https://www.biggerpockets.com/blogs/9145/53959-vet...

Ivan Barratt · Answer

@Marcin Moscicki I agree with @Todd Dexheimer big time. Happy to chat in/outs of syndication.

Dave Foster · Answer

@Marcin Moscicki, It's always in the in between that most of your risk lies.  Trying to be passive but using active investing measures and models leaves you vulnerable.  Needing the extra return from the elbow grease of active investing but only getting passive returns is also not good.

@Todd Dexheimer, makes a lot of sense.  If you do like your day job then stay with it.  Do what you love and invest passively in what you want to make money off of.  That way both your days and your bank account will be fuller.

Marcin Moscicki · Answer

@Todd Dexheimer Thanks for the reply...I did read through that post, very interesting.  Passive investing is definitely the goal as I don't have to quit my day job, do you know of any syndications/crowd funds that you would recommend? If not, can you point me in the direction of where I would be able to search for some? Thanks!

Highly Recommended MFH Turn Key Providers?

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