All Forum Posts by: Anton Ivanov

@Sara Hodge

I bought 2 turn-key rentals this year in Birmingham. I went through Norada Real Estate, which is a marketing company, with Decas Group being the actual turn-key seller and also my PM.

As far as the buying process and the parties involved, it went very smooth. Both Marco and Norada and J and Jarrod at Decas Group are great guys to work with and did their best to meet all of my demands (which there were quite a few) and help through the process as best as they could. I would recommend them for sure.

As far as investing in the Birmingham market in general, I would agree with the other people who posted here, that you need to understand what your goals are and what the Birmingham market is (and is not).

It's probably one of the cheaper markets in the US right now, so the returns can be quite good, but with that, you may be buying in lower quality neighborhoods (a lot of Section 8 tenants) and older homes (most are 1950 or older in my experience). This isn't necessarily a bad thing, just something to know.

As far as ZIP codes, I bought in 35211 and 35206. Both are C neighborhoods with most likely Section 8 tenants, but I wanted to diversify my real estate portfolio with higher cap rate properties. The price range here is $40k-$50k for 3/1 SFRs. Rent is around $750.

If you want a little more quality, 35215 and 35235 are much better areas. The prices go up to $60k-$70k with rents around $850. Cap rates are noticeably lower, but less Section 8 and newer homes.

I'll leave you once again with the importance of setting goals for your real estate investment portfolio and letting those goals drive your acquisition criteria. It will be much easier to focus on a geographical area if you know precisely what you want.

Feel free to contact me directly if you want more information.

@Kyle Scholnick

I agree with you that the numbers presented on many turn-key companies' listings can be way too optimistic, if not unrealistic altogether. 

I just don't think that's something that only happens with turn-key providers. I've seen the same thing from just about everybody who is trying to sell investment real estate, unless they are your close friend/partner. That's the nature of this business, even though it may sound a bit cynical.

@Vinod Polina

@Kyle Scholnick

Regarding cash flow analysis, like some of the others pointed out - ALWAYS do your own math, regardless where you are buying the property. I know it's not something that's apparent to new investors, but unfortunately there are just too many differences between how different people calculate cash flow and cap rates. In a perfect world we would do it all the same, but that's not the case.

Like I've mentioned earlier in this thread, you shouldn't treat a turn key purchase as anything different. You shouldn't expect a stress-free purchase process. You shouldn't expect a maintenance-free home. And you shouldn't expect every turn key deal to be a good deal. You need to do the exact same research that you would when buying any property.

The exact same goes for the exist strategy. Your exit strategy should not depend on whether the home was a turn key or not, because there really is no difference after you buy it. Your exit strategy needs to depend on your goals, your finances and your portfolio strategy.

Once you stop treating turn keys differently, it will solve a lot of your problems. Feel free to PM me if you have any specific questions.

That sounds more like what I would do. There are hundreds of plugins available for WordPress that may offer the exact functionalities you need and it's fairly inexpensive to built custom ones. To give you an idea, this entire website is built on WordPress.

I second what Sam said - a custom web app design is not cheap at all. What you were quoted seems reasonable from what I have seen myself in the past.

Depending on what you're trying to do, there may be other routes, like starting with a simpler web site or going for mobile right off the bat. I'm finishing development of my first mobile application that took me about 4 months, working myself part-time (I learned all of the coding for it too).

PM me is you want to chat some more!

Hi James,

If like you say you've been on BP for some time, you probably read most, if not all, the information you need to do your first deal.

To take the next step, I would suggest spending some time to write down very specific long, medium and short term goals pertaining to real estate. That will give you a road map to follow and point you to what you should do in the next few months/years.

From then, it's a matter of taking action and actually putting your knowledge to good use. You will learn more from your first deal than you will from all the reading and talking you can do, so I would say it's better to start sooner than wait until "you have all the facts", so to speak.

Good luck!

I didn't really agree with this article he wrote a while back, but his general message is outstanding.

Any wealth building, including through real estate, comes down to this simple sentence, which you probably heard before:

Spend less than you earn and invest the difference wisely.

To me, there are three parts to that: 

1. Maximizing your income
2. Minimizing your expenses
3. Doing a good job at investing the difference

MMM focuses primarily on minimizing expenses. Nothing wrong with that, just understand that it's only a part of the big picture.

Joseph,

I think the people who say you should start with you local market are generally correct. It's always easier when you can talk to people in-person and see the homes and the process yourself. My first investments were local and I learned a ton about neighborhood research, inspections and rehabs that I would not have otherwise. This knowledge helped me considerably when buying remotely.

But yes, I think there are reasons not to invest in your own market. I don't any more because San Diego home prices are generally high, the cap rates are low and the market is saturated with investors. These conditions make finding good deals difficult (although not impossible).

Another reason is diversification. Although some people here would disagree, I believe the diversification principles that are very well accepted in stock investing apply in real estate as well. My goal is to diversify my real estate portfolio across different states, cities and demographics (high end vs low end, for example).

As many investors would tell you, you should start with your goals. What are your long-term real estate goals? What are your short term real estate goals? Start with these questions and be as detailed as possible. Whenever you look at a market or a specific property, ask yourself - will this area/property move me closer to my goals? If yes, then you can proceed. If no, look somewhere else.

Out of curiosity - have you looked at your local market and/or connected with local real estate investors? Meaning why are you consider investing out-of-state instead of near where you live?

I'd say that investing out-of-state is doable on your first deal, but it may not be necessary. If you can find deals that meet your criteria locally, you should go with that.

Hi Joseph,

I live in San Diego and I bought 2 SFRs I found through Norada earlier this year – 1 in Atlanta GA and another in Birmingham AL. Overall, it was a very positive and smooth experience. Marco, who is the owner and the person you will most likely be working with, has many connections throughout the US and is very knowledgeable about the turn-key acquisition process.

Although these were not my first RE deals, he insisted on helping me through the entire process to make sure the deals went as smooth as possible. Since it looks like you are a beginner investor, you will find that extremely helpful. Be sure to ask for Marco’s property purchase checklist.

Now with that said, you need to understand what turn-key investing is and what it isn’t. What you should get is a freshly rehabbed property with a tenant in place. You will end up paying market value, but you will not have to deal with finding and rehabbing the property yourself.

At the same time, not all turn-key properties are worth buying. You need to start by finding a market (state, city) that fits your goals and preferences. Different markets have different economic fundamentals and demographics. The Norada website has descriptions and fundamentals for each market they operate in, which is a good place to start.

After you find a suitable market, you need to determine what your criteria for the property is (price range, neighborhood quality, size, age, etc.). It will be much easier for your to find suitable turn-key properties if you do the above instead of just browsing everything that’s available.

To sum it up, treat a turn-key acquisition as you would any other purchase. Don’t assume that the homes you are looking at are perfect. Double check all of the numbers until you know exactly what you are buying.

Feel free to reach out if you have any specific questions.