All Forum Posts by: Abdul Azeez

And why would buying a property at market value not be a good investment? When you buy a stock you buy at market value and look at annual returns inclusive of dividends and long term appreciation. For turn key real estate, the different components of return - cash flow, tax benefit, debt paydown and long term appreciation still hold true. The going in with equity part does not apply because someone has done the hard work in getting it to a shape where you can buy. I do not see this necessarily as a bad thing.

I have not received any input on this. My user experience with Biggerpockets is turning out to be difficult as this is the second time this has happened where no useful info. is available when a legitimate question is asked. But whereas when something needs to be promoted quickly, I find a lot of responses.

Folks - Kindly PM me if you know of any good investor agents in Cental / South NJ. I am looking for the following qualifications:

1. Experience with Fannie Mae and HUD properties or foreclosures

2. Experience being an investor and holds properties on own name which are generating positive cash flow

3. Experience in financial analysis and metrics - Cap rate, Cash on cash return etc. and ability to understand what "making money going in" is

4. Experience in recommending the right offer price for an investment property and understands that in the investment game you need to make multiple offers until you find something where your cash flow needs are met without getting frustrated about the pre-dominant volume of offers that may not result in anything

If you are an Agent, kindly only PM me if you have the above qualifications. I am looking for seasoned agents (not newbies) who have the above experience and temperament to work with investors.

Dean - I am sorry but I have to respectfully disagree. In any of the scenarios I have seen an initial equity position in an investment is what you have put in And over time this increases due to reinvestments or debt paydown. 

@Dean Letfus 

@Alex Craig

Dean - You are referring to built in equity. That's not the traditional definition of equity. Equity is the amount of money you put in. Assuming a $100k house priced at Market value and you put in $20k your equity is 20%. Assuming a $100k house you purchased at $80k putting down $20k, your equity position is 40% and you are going in with built in equity.

Alex - I am aware of equity which is what I have explained above. 

does that have to do with the quality of the pm you selected than the concept of turnkey itself?

2% rule does not work in many places.

@ Joel Owens I would love to hear about these alternative strategies. I thought these were advanced options. Can you point me in the right direction?

@Matt R. Unfortunately in NJ, the economics don't work out. We have one of the highest property taxes in the nation. I have put 7 or so offers with all of them turning out a dud. I have run countless analysis on MLS deals and the cash flow is just not there. Even if I were to target around $150 per door there is a significant variance with the listing price. If I do find some good deals on the condo side where property taxes are lower, the HOA makes up for the lower property tax. Overall returns are not good given all the above. I did some analysis on a few TK properties in Memphis, TN and overall COC and mortgage paydown comes to around 10% with cashflow in the $150-$200 range. This does not seem like a bad idea. I am not looking for a profit going in as those deals are few and far and the only way to do it is if you can acquire properties well below Market value and rehab them or find a desperate enough seller to be able to do it. Getting a 10% return does not seem that bad given my strategy to pay extra principal payments through the extra cash flow per month and reduce my mortgage duration. Wrt profitable exit, if i put down say $20k and after 10 years or so walk away with the ability to get a much larger sum due to mortgage paydown, even in the absence of appreciation, this seems like a good deal to me. The bottom line is I can sit on the sidelines putting offer after offer on properties in NJ with no real result or start investing in TK and start making 10%.

Folks - would you buy if the TK provider says its still ok if appraisal is less than the value they are selling for?