Originally posted by @Julie Sisnroy:
This is a valuable thread on turnkey and one of the more thorough and recent. I can relate to @Dan T. completely as a full-time worker (and part-time second job) with a young child. In addition, I have similar goals--long term growth, even at the sacrifice of cash flow and the most "perfect" numbers. It seems in the REI game (or any investment for that matter), it comes down to time or money - rarely do we have both to play with. And usually, we sacrifice one for the other.
However, as someone who has been investing in this real estate game for 14 years, I also want to get the best deal and not throw money away, so I understand the other posters here. I have never used "turnkey" and have even self-managed out of state rentals (it wasn't the nightmare people often tout). So, which way do I go? There is the dilemma. Do I get a turnkey and get it over with, knowing I could be losing money, but have some passivity in the investment? Or do I spend the time in analysis paralysis, reading every thread and overthinking it, trying to find the perfect market and the perfect team to achieve the perfect numbers? Well, our lives change and we have different needs. I, too am not a full-time real estate investor and want a more passive approach. I was single and childless when I started this -- that is not the case now. So, here I am after reading all this, and still not knowing what to do. Times are also a lot different than even 5 years ago. So, I appreciate this post and look forward to hearing updates. Hopefully, I will pull the trigger soon. :)
I researched forever and there was always potential for more cash flow/profit. Everyone talked about putting in the work to make more. NO ONE talked about the risk inherent to the larger return. Having managed several renovations ON SITE for my primary residence, i know the struggle of trying to keep a contractor and project on-task and on time. If you develop relationships and have "boots on the ground" in the market in which you're planning to invest. I would assume it would take several projects and speed bumps before you narrow down to the crew you use. This may or may not be more expensive than going turn-key up front while you learn your lessons but may be the better way to scale.
For me, I looked at the prices of the houses in the areas in which i am interested and the crappy houses are slightly under the "Zestimate" while the REI Nation houses with full remodels and all CAPEX replaced were slightly above. This is an insane market, right now... without having access to the relationships, deal lists, AND capital to close immediately with no contingencies, i can't see any inexperienced investor getting a deal that makes sense in this market. Seasoned investors with access to cash and specific market knowledge are the ones operating in the margins these days.
I chose to let REI do the work for me as they're market experts that find the deals, do thorough renovations and sell to me for right around what the property appraises for while cash-flowing. Best case, i did a bit better myself, worst case, i did WAY WORSE. The scale leans further in the "risk" than "reward" the way i see it (not being a pro myself) so i went REI Nation and haven't looked back. I am up to 4 properties all acquired in 2020. One of the Four was acquired outside REI Nation through a trusted agent i connected with in the process and I bought a high-end renovated property for $20K under appraised value. I was ONLY able to spot this opportunity from my experience buying with REI.
In short, you can do better but, for me, it took going TK to become knowledgeable/confident enough within my market to make my own move. Looking back, I wouldn't have done it any other way.
