Investing while working and keeping a 24/7 job

[Matthew Yeoman]

Hey Bigger Pockets fam! My names Matt and I am a 26 year old new investor. I have been doing my research, reading, and learning about different investment tactics. The main problem I have at this moment is my job. I work on a yacht, which means I am always on the clock, do not have nearly any free time to work on my business, as well as spotty wifi and cell service to manage anything. But having said that I LOVE what I do and want to keep doing it for the foreseeable future. What I am wondering is, what would be a good investing avenue to take. I have looked into Turnkey properties because of their all inclusive nature, but I wanted to know if there was anything else similar where I do not have to be present daily. If there is not anything similar, then does anyone have suggestions on reliable Turnkey properties that have proved faithful?

Thanks! All the best, Matt

[Kai Kopsch]

The problem with most turnkey properties I saw lately is that the quality of the rehab is not concicdend. I would recommend buying a "normal newer property of the MLS" on a vacation. It's possible to do a transaction in under two weeks with the right Realtor in your area.

[Scott Swanson]

Hi Matthew,

I agree with Kai about turnkey rehabs. I would say that 90% of the time we go look at a property  for our investors, that's supposedly turn key, it's not. We  have to maybe paint,  replace some fixtures or whatever. Rarely are they turn key! Plus you usually pay more for them than if you had someone do the rehab for you. That sounds like it's not possible, given your situation. But we work with investors all over the nation because we do the rehab for them and also manage them. So their location doesn't matter. But be careful with turn keys. I hope this helps. Best of luck.

[Joseph Crunkilton]

@Matthew Yeoman

I'm going to have to disagree with the guys above. I've invested with @Zach Lemaster over at Rent to Retirement and have been please with the quality of work. If you're looking for a hands off investment you can trust, check out some of their inventory. 

[Zach Lemaster]

@Joseph Crunkilton Thanks for the mention!  We do our absolute best to set our investors up for success.

@Matthew Yeoman  It's all about the team you are working with.  Of course like any industry you will have people that operate at a high level & do quality work, and others that do not.  It's all about choosing the right team with the right track record.  We have helped hundreds of investors build successful portfolios in multiple states, and have the track record with investors to back it up.  Feel free to see our company reviews here:  

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/forums/48/topics/874096-reviews-on-r2r-and-nch?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5123754

https://www.biggerpockets.com/forums/311/topics/883772-turnkey-investing-renttoretirement-feedback-reviews?highlight_post=5171720&page=1#p5171720

https://www.biggerpockets.com/users/ZacharyCole/references

[Bradley Sriro]

@Matthew Yeoman I think that a full service turnkey provider would work great for you. I am personally investing with JWB Real Estate Capital in Jacksonville, Fl. But there are many quality providers out there that you might want to check out. REI Nation is one company that operates in several markets. I have been considering them as well and one of the founders @Chris Clothier wrote a great book on passively investing in turnkey rentals called Turnkey Revolution. If this is something that interests you, I would definitely recommend reading it. Some other providers that I have looked at include: Turnkeyinvest.com, Memphis Investment Properties, and Easy Street Property Investments. I hope this helps and if you ever have any questions, feel free to message me. Best of luck!

[Matthew Yeoman]

@Zach Lemaster Thank you for the reply. Im taking a look at your website now, you seem like you really have some great support from your current / past customers. I would love to get in touch some time and chat maybe over the phone. Your company sounds like the right fit for what I am aiming to do.

[Matthew Yeoman]

@Bradley Sriro Thanks for the information! I will check those out. I have heard some rumors about the quality of turnkey companies. How do you assure you are getting a good deal with them, as well as the quality? Do you see the houses yourself? Run the numbers yourself?

[Bradley Sriro]

Originally posted by @Matthew Yeoman:

@Bradley Sriro Thanks for the information! I will check those out. I have heard some rumors about the quality of turnkey companies. How do you assure you are getting a good deal with them, as well as the quality? Do you see the houses yourself? Run the numbers yourself?

As with any property you purchase, you have to do your own due diligence. With that being said, they will provide you with the property financials to evaluate such as vacancy, maintenance/capex, management fees, tenant placement fees, taxes, insurance, cash on cash returns, etc. You then have to go over these numbers to verify that they are accurate. In terms of the property condition/ quality, on renovations the quality turnkey providers will ensure that all of the deferred maintenance is taken care of and corrected prior to renting it and turning it over to an investor. Some of the providers also sell new construction. You can easily get references for any of them and talk to other investors that have invested with them as well. 

I live in Miami, Florida but the prices here don't make sense for SFH rentals. That is why I am now investing out of my area. While I will not see the properties I am purchasing in person prior to acquisition, I do receive the providers detailed scope of work and renovation budget for the completed renovation, pictures, and a video walk thru. I also use an independent home inspector to complete a full home inspection. You can then use the home inspection to compare with their scope of work/ renovation to make sure that everything matches up. It does involve a level of trust though. Finally, if you are using leverage/ financing the deal (which I recommend), your lender will order an appraisal to determine the properties value. If it appraises low, then you renegotiate the price to appraised value with the provider. Never pay more then appraised value though! At the end of the day, the companies reputations are based on the quality of homes they provide and the level of service that they afford their clients. I wouldn't rush to pull the trigger on anything (turnkey or otherwise) though until you have a better understanding of everything.

[Zach Lemaster]

@Matthew Yeoman

I'm more than happy to connect with you at any point in time.  Just let me know.

I also think @Bradley Sriro took the time to leave you a very detailed & informative response.  Lots of good insight in his post.  I would agree with everything he said.  Lots of time on BP you get mixed opinions with not much actual substance, but this is very good advice from a seasoned turnkey investor.

Please let us know if you have any other questions at all.  We are all happy to assist however we can!  It's all about choosing the right strategy to meet your goals, and then taking action!

[Matthew Yeoman]

Originally posted by @Bradley Sriro:

Originally posted by @Matthew Yeoman:

@Bradley Sriro Thanks for the information! I will check those out. I have heard some rumors about the quality of turnkey companies. How do you assure you are getting a good deal with them, as well as the quality? Do you see the houses yourself? Run the numbers yourself?

As with any property you purchase, you have to do your own due diligence. With that being said, they will provide you with the property financials to evaluate such as vacancy, maintenance/capex, management fees, tenant placement fees, taxes, insurance, cash on cash returns, etc. You then have to go over these numbers to verify that they are accurate. In terms of the property condition/ quality, on renovations the quality turnkey providers will ensure that all of the deferred maintenance is taken care of and corrected prior to renting it and turning it over to an investor. Some of the providers also sell new construction. You can easily get references for any of them and talk to other investors that have invested with them as well. 

I live in Miami, Florida but the prices here don't make sense for SFH rentals. That is why I am now investing out of my area. While I will not see the properties I am purchasing in person prior to acquisition, I do receive the providers detailed scope of work and renovation budget for the completed renovation, pictures, and a video walk thru. I also use an independent home inspector to complete a full home inspection. You can then use the home inspection to compare with their scope of work/ renovation to make sure that everything matches up. It does involve a level of trust though. Finally, if you are using leverage/ financing the deal (which I recommend), your lender will order an appraisal to determine the properties value. If it appraises low, then you renegotiate the price to appraised value with the provider. Never pay more then appraised value though! At the end of the day, the companies reputations are based on the quality of homes they provide and the level of service that they afford their clients. I wouldn't rush to pull the trigger on anything (turnkey or otherwise) though until you have a better understanding of everything.

 Very informative Bradley thank you! I did not even think about the appraisal with the lending companies and how that coincides. For some reason I thought that turnkey providers only wanted full cash investments. Do you find they offer financing themselves or do you usually use a conventional mortgage?

Thank you for all the information I am learning alot.

[Zach Lemaster]

@Matthew Yeoman

We have any kind of financing options you would need available (conventional, private, non-recourse, seller financing, etc.).  It's all about matching the right financing to meet your goals.  Most of our investors go conventional as that is the cheapest loan terms, and we currently happen to have the lowest interest rates we've seen!  Very good time to take advantage of excellent financing terms!

[Matthew Yeoman]

Originally posted by @Zach Lemaster:

@Matthew Yeoman

I'm more than happy to connect with you at any point in time.  Just let me know.

I also think @Bradley Sriro took the time to leave you a very detailed & informative response.  Lots of good insight in his post.  I would agree with everything he said.  Lots of time on BP you get mixed opinions with not much actual substance, but this is very good advice from a seasoned turnkey investor.

Please let us know if you have any other questions at all.  We are all happy to assist however we can!  It's all about choosing the right strategy to meet your goals, and then taking action!

Yes, his response definitely opened my eyes to a lot. I feel lucky to have gotten some great detailed responses. Definitely more to learn and talk about than I thought. 

[Bradley Sriro]

Originally posted by @Matthew Yeoman:

Originally posted by @Bradley Sriro:

Originally posted by @Matthew Yeoman:

@Bradley Sriro Thanks for the information! I will check those out. I have heard some rumors about the quality of turnkey companies. How do you assure you are getting a good deal with them, as well as the quality? Do you see the houses yourself? Run the numbers yourself?

As with any property you purchase, you have to do your own due diligence. With that being said, they will provide you with the property financials to evaluate such as vacancy, maintenance/capex, management fees, tenant placement fees, taxes, insurance, cash on cash returns, etc. You then have to go over these numbers to verify that they are accurate. In terms of the property condition/ quality, on renovations the quality turnkey providers will ensure that all of the deferred maintenance is taken care of and corrected prior to renting it and turning it over to an investor. Some of the providers also sell new construction. You can easily get references for any of them and talk to other investors that have invested with them as well. 

I live in Miami, Florida but the prices here don't make sense for SFH rentals. That is why I am now investing out of my area. While I will not see the properties I am purchasing in person prior to acquisition, I do receive the providers detailed scope of work and renovation budget for the completed renovation, pictures, and a video walk thru. I also use an independent home inspector to complete a full home inspection. You can then use the home inspection to compare with their scope of work/ renovation to make sure that everything matches up. It does involve a level of trust though. Finally, if you are using leverage/ financing the deal (which I recommend), your lender will order an appraisal to determine the properties value. If it appraises low, then you renegotiate the price to appraised value with the provider. Never pay more then appraised value though! At the end of the day, the companies reputations are based on the quality of homes they provide and the level of service that they afford their clients. I wouldn't rush to pull the trigger on anything (turnkey or otherwise) though until you have a better understanding of everything.

 Very informative Bradley thank you! I did not even think about the appraisal with the lending companies and how that coincides. For some reason I thought that turnkey providers only wanted full cash investments. Do you find they offer financing themselves or do you usually use a conventional mortgage?

Thank you for all the information I am learning alot.

Most providers have several preferred lenders that they work with. You are able to shop for rates amongst them and then select who you want to work with. For single family, I choose to go with 20% down conventional loans.  

[Tom Ott]

Originally posted by @Matthew Yeoman:

Hey Bigger Pockets fam! My names Matt and I am a 26 year old new investor. I have been doing my research, reading, and learning about different investment tactics. The main problem I have at this moment is my job. I work on a yacht, which means I am always on the clock, do not have nearly any free time to work on my business, as well as spotty wifi and cell service to manage anything. But having said that I LOVE what I do and want to keep doing it for the foreseeable future. What I am wondering is, what would be a good investing avenue to take. I have looked into Turnkey properties because of their all inclusive nature, but I wanted to know if there was anything else similar where I do not have to be present daily. If there is not anything similar, then does anyone have suggestions on reliable Turnkey properties that have proved faithful?

Thanks! All the best, Matt

 Turnkey investments are a pretty good way to keep the investment very passive. Most investors who invest OOS or work a full-time job, go with a Turnkey Provider. The idea is that the Provider owns the property first, they renovate it, sell it to you with a tenant in place, and then they manage it after the sale. Everything should be done in-house and it should be 100% passive for you.

Good luck to you! 

[Brandon Goldsmith]

Investing oos or in a market, you are familiar with are greats options. You are ultimately going to need to develop a solid team in one specific market that matches your investing goals. With a solid team in place, a lot of it can be hands-off and you will only need to call the shots for which property you are going to buy. It is very doable. Good Luck! @Matthew Yeoman

[Ethan Perry]

@Matthew Yeoman. You might consider investing in real estate funds and syndications. This route is about as close to passive as you can get in real estate. Brian Burke has a book on this called The Hands off Investor. Might be worth checking out!

[Jonathan Oh]

If you quality as an accredited investor, you have other routes that are much more passive like syndications. But everything has its pros and cons, so just do your research. Hope this helps!

[Justin Reed]

Hi @Matthew Yeoman!

I'm so jealous - always wanted to work on a yacht!

Have you looked into raw land at all? That's what I do and it's pretty easy to just do when you do have extra time and have a team of VAs manage for you. I started doing it SUPER part time once a week or so and just put systems in place, then it was basically running on the side for me and I just approved deals etc when I had time.

Feel free to reach out if you have any questions.

Best of luck!

[Marlen Weber]

You can totally invest in real estate while keeping your full-time job. By investing in apartment syndication deals, you put your money in real estate without being a landlord. This means that you can continue to do the job you love full-time.

[James Wise]

Originally posted by @Matthew Yeoman:

Hey Bigger Pockets fam! My names Matt and I am a 26 year old new investor. I have been doing my research, reading, and learning about different investment tactics. The main problem I have at this moment is my job. I work on a yacht, which means I am always on the clock, do not have nearly any free time to work on my business, as well as spotty wifi and cell service to manage anything. But having said that I LOVE what I do and want to keep doing it for the foreseeable future. What I am wondering is, what would be a good investing avenue to take. I have looked into Turnkey properties because of their all inclusive nature, but I wanted to know if there was anything else similar where I do not have to be present daily. If there is not anything similar, then does anyone have suggestions on reliable Turnkey properties that have proved faithful?

Thanks! All the best, Matt

 I see no reason why you would want to quit your job to invest in real estate. If you did that you'd have nothing to invest. Do not quit your job.

[Guido Nunez]

@Matthew Yeoman try passively investing. Good returns and you’ll meet other investors.

[Nick Barlow]

@Matthew Yeoman we partner up-I don’t work on a yacht 24/7 and have spent all my investable funds, lol.

All kidding aside, I’m sure you can find a PM firm that will do the heavy lifting on a rehab and rent it out for you, so your only true time/expense is the house search, financing, closing costs, and vetting PM.

REITs are another way for passive income, become a hard money lender, or invest in deals on roofstock or similar sites, or even invest in notes.

The common critique I hear of turn keys have already been mentioned, but are only compared to active involvement by the investor.

Getting the depreciation, mortgage pay down, and general 2ish percent appreciation annually are still achieved with trinkets-because you an asset.

Disclaimer-I don’t have anything from a turnkey provider. And kudos to you for having a job you love. That is something amazing in and of itself. Good luck!

[Jesse Daconta]

@Matthew Yeoman

Turnkey properties sound good in concept but it will turn into a full-time job. You always have to manage the property manager. Connect with me if you want my point of view :)

Best,

[Erik W.]

@Matthew Yeoman, hi and welcome to BP!

A few questions, then followed by a few thoughts....

1) If you hardly have any free time (per your initial post) how have you found time to read, research, and get educated?  I am not on call 24/7.  I work a regular 7-4, and I can tell you that unless you plan to hire out everything (management, maintenance, accounting/bookkeeping, inspections, etc) you will probably spend between 2 - 4 hours a week managing a handful (<5 properties).  Even passive investors like syndicators have to keep tabs on what's happening with the project now and then.  Where will you find the time to be an investor?

2) Investors are successful when they provide a value in exchange for money.  What value are you going to provide: Capital, Expertise, Analysis, etc?

3) Where do you see yourself in 5 years, still on a boat?  Settled down with a family?  Something else?

Those are the questions, now some thoughts.

1) I've been in this biz 15 years, since March of 2005.  It took me almost 10 years to get most things on autopilot.  Maybe you'll move faster, but to do that it will take access to a deep roster of motivated, talented, and trustworthy people.  Those are hard to find and retain, especially in this environment.  Most times someone who is that worthy will decide to strike out on their own.  Again, back to item 2 above, what value do YOU bring to the equation that someone else needs?  If you're just motivated and excited....well, that's everyone in this business.  If I had $100 for every motivated and excited new "investor" I've met, I could buy a small house.  You've got to find a niche and fill a need that today isn't being filled.  Doesn't mean you can't do it, but you will find success after hashing out why people need you to make deals work and then communicating that information to the correct people.  If you're a money provider, find people who need money.  If you're a deal analyzer, find people who need deals analyzed, etc.

2) Be ready to constantly learn, grow, and adapt.  This isn't the kind of deal that you lean "the way" to do it then rinse and repeat over and over.  Conditions will change.  Example: we're living under a nation wide CDC eviction moratorium right now, which no investor would have predicted in the realm of possibility in Nov 2019.  That has totally upended some business models.  We haven't heard too many bad stories yet, but if we get another lockdown (one of VP B's doctor/advisors is suggesting a 4-6 week total lock down) that could cause already fragile investors to fail.  You and/or the team of experts working on your behalf must be able to adapt and overcome, or you can lose everything.

3) Have reserves ready for all the reasons mentioned in the previous comment.  Tenants who don't pay.  Tenant's who trash the place.  Prolonged evictions.  Prolonged vacancies.  Major home components that die.  Again, some land lords have had tenants not paying them since MARCH of this year....MARCH!  That's 8 months without rent.  Could your reserve funds cover 8 months of vacancy (and would you WANT to)?  

4) Teams are great, but they cost....good teams cost a good amount.  Awesome teams cost an awesome amount.  You can be as hands off as you want, but the more you hand off to others, the less you make.....unless you have found a secret sauce that allows you to pay them less while working for you than they would make while working for themselves.

This all might sound very discouraging.  It's not meant to, but rather it's meant to give you pause and to have you think over how and why you believe real estate is your optimal route to success.  There are plenty of ways to invest in real estate and other things for that matter.  For example, some people do really good with value stock investing, which involves far fewer moving pieces and can be done in your very limited spare time.  Plus stocks don't "trash" your house(s).  They can truly be "mail box money."  Or you could be a hard-money lender.  Lots of ways to skin the proverbial cat in this industry!

I hope this helps.

[Aubrey Tatarowicz]

Turn key providers can vary drastically.  I've been happy with my turn key properties, but I've also heard horror stories from friends that worked with different providers.

As others have mentioned, you may also want to look into real estate syndication.  If you're accredited, there are a lot of options.  If you are not accredited, it is still possible to invest in syndications, but you'll need to find operators that work with sophisticated investors and build a relationship first.