All Forum Posts by: Ali Boone

As some others have said, drop the 50% rule out of the equation. Exactly the point you're bringing up about it is why it's not a helpful metric--it really doesn't tell you anything. Stick with actual numbers.

If the property you're talking about is in a good solid growing neighborhood and the property doesn't need any work, this looks like it could b ea good deal. But there's a lot more that goes into saying whether something is good or bad, not just the numbers. These numbers look good IF there are certain other low-risk factors about this property. But if it's in a rougher neighborhood and/or the property needs a lot of work, the numbers aren't great. And lastly, how is the purchase price compared to market value? That's yet another factor.

I would say to change up your thoughts a little. Instead of asking what to keep an eye out for, although everyone else's responses are fantastic and it can help you with what I'm about to say... focus on learning how to do thorough due diligence. If you learn how to do due diligence, a lot of the questions and concerns someone could have about a turnkey company can become moot because you then know how to verify everything on your own instead of having to take anyone's word for anything. I started in REI with turnkeys and I've since worked with turnkey investors for the 11+ years since, and the absolute hands-down thing I've seen happen over and over is everyone takes a provider's word for everything (neighborhood class, pro forma numbers, quality of the PM, etc.) instead of putting their big boy (or girl) pants on and taking on the mindset of a non-turnkey investor, which is to dive into everything and verify it. While a perfect turnkey world would hand you a perfect finished product, it's not a perfect world we live in.

With all of that said, and I also acknowledge it's a slight deviation from what you're asking, use the lists of things everyone else gives you as guidance on what things to make sure you're checking during your due diligence. Property & rehab quality (via an inspector), neighborhood quality (run reports but also talk to 3rd party PMs and pick their brains... I just did this on a property this week and decided to bail from the property when the unanimous answer was it was a rough area), confirming numbers (you can verify all but vacancy and maintenance estimates), interview more than one property manager, etc. Do all that, and you could be golden!

The mindset every turnkey buyer should have is that going turnkey is just a vehicle to get you the property. It doesn't alleviate the need for you to do as non-turnkey investors would do and dive into everything and check it all out. If only we lived in a perfect world!

Independence can be great. All of KC has been on a massive swing for years. I was just there in March touring properties and Independence is definitely a hopping place to invest. Every city has better and worse areas, but as a whole it's totally doable. Would you be wanting to put work into a property or get something more rent-ready/turnkey if you're investing in it from afar? If you do something with less work required, you wouldn't need any help from your friends/family out there, but you'd still be able to write-off trips to go there and visit them since you could go check on your property while you're there.

Are you wanting residential or commercial multi-family? $100k down can get you into small commercial if you're interested. Also, do you want value-add properties or rent-ready/turnkey?

If you're looking to invest in a turnkey rental property and aren't sure where to turn, I run two Facebook groups that you can join to help you!

Turnkey Rental Properties For Sale:

Turnkey properties from vetted (personally by me) turnkey providers are listed for sale in this group, and additional discussions are had related to the markets and providers. (FYI: you're not allowed to post turnkey rental properties for sale in this group without prior approval)

https://www.facebook.com/group...

Turnkey Rental Properties:

This group is for general turnkey discussions, questions, support, meeting fellow turnkey investors, etc. We've done Facebook Live events, group coaching events, meetups, you name it. This group is not specific to providers and markets I work with, but rather broad turnkey discussions. No properties or services are listed for sale in this group.

https://www.facebook.com/group...

Come join the turnkey fun! You can also direct message me any time with questions about turnkeys, coaching, and I also work with some value-add commercial deals. 

Quote from @Cody Petersen:

@Laura Marks is your person. 

She messaged me and I ended up talking to her yesterday on the phone... she's fantastic! Thank you for the referral! We exchanged info so I can give her name to my clients. Huge thanks!!

The position has been filled! Thanks everyone who reached out.

The answer is yes, but the reason I'm commenting at all is because I'm so excited to see someone acknowledge wholesaling's actual place in REI... it's investing-related, and can be a fantastic start to investing, but it's not actually investing. Applause to you! Just for the fact that you brought that forward, you're already off to a great start and will do great.

You can add addendums to the CAR form. That's what I do. I can't imagine needing to pay attorney fees to create a whole new agreement if it's just a few things you want to add.

I did something similar in LA... got a duplex in Venice that's in a great neighborhood, closer to the top of the market than not, negative cash flow for a while. The only difference is my plan is to live in it myself later on, so it's a mega long-term investment. Since we got it, we did a money-in refinance so lowered the mortgage payment, so now we're in the positive. If one were to run cash flow returns, they're low, but a lot like what you said-- AA+ neighborhood, long-term hold, and LA is unlikely to not appreciate, especially Venice since it's squished between SM and MDR which have already been developed, so Venice won't last much longer before the developers come in too (ugh, I live in Venice and I don't want it to gentrify but it's already started).

So if you can afford the negative cash flow for awhile or whatever expenses, rents will eventually catch up, you're likely going to see appreciation (probably more than I will since mine is a duplex and they don't appreciate as much as a SFR), and you ultimately have a plan for how you plan to profit on it... it could be a good move! Just speculative. But if it's a long-term hold, I can't imagine it wouldn't work out well.