All Forum Posts by: Dan T.

@Dan T. What’s the purchase price and rent?

Hi Dan,

I also live in CA and looking to invest in Memphis. I have interviewed SEVERAL turnkey companies and received inventory from them, I have to agree that the homes seem to be overpriced. I knew from the start that I would be paying for the renovations, but for some of the areas I was looking to invest in, I couldn't find comps that would support the purchase price. Additionally, the COC return did not look appealing. Each company offered their analysis, but after I analyzed (with my limited knowledge) each deal, the COC return was NOT what their paper returns stated (Most of them did not account for contingencies). I am a busy mom of 3, wife, and full time professional so turn key is sooooo appealing to me. But I haven't found a deal that makes sense to me yet. I will continue my search and in the meantime attempt to build a team with move in ready properties in Memphis that I can purchase. I am still open to Turnkey properties, but I am determined not to get too excited to buy something that I don't fully analyze the entire situation.

FYI...I did ask a couple of turn key companies if the appraisal came back lower than the asking price are they willing to negotiate and one said yes and one basically said NO. Of course the one that said NO, I crossed off my list immediately. Good Luck. I am looking forward to hearing about your adventure. I hope we are swapping stories within the next 3-6 months about our properties that we have acquired. 

I've looked into the TK market too and IMHO its not nearly as good as advertised...... you overpay up front, often get weak if any appreciation and all that "cash flow" you got disappears when you have turnover or sell....

Many TK leave off vacancy, and/or CapEx and other "details" that crush the numbers once you add them in....

Just didn't appeal to me.....

No mine wasn’t with memphis invest but I’m guessing your house will be larger which means when they do leave your turnover expenses for paint etc will be higher than mine were.  
if I were you I would look into private lending or syndications.  Owning long distance rentals is a giant headache and everything gets more expensive 

@Dan T. Have you ever owned investment property? I owned turnkey in memphis for 2 years and I can tell you first hand, the experience will not be what the provider pitches you.

Most the people on this thread are not unbiased. They sell these properties. I have nothing to gain by lying. I’m not selling anything.

If you paid 170k for a property worth 155k your true equity is less than 15k because 1) you’ll have selling expenses and 2) most investors won’t be willing to pay what you paid.

Your cash flow long term will be zero because when your tenant leaves it’ll be a guaranteed 3-5k in turnover expenses each and every time, regardless of what the rehab was.

Sure. I invest for cash flow, and look for around $300 per month, after PITI and property management. That was much easier 5 years ago, and even 3 years ago. But even today, I will not go under $250/mth.

Note, that is Cash on Cash. I do not consider equity from appreciation in my returns, nor do I consider equity from debt pay down in my returns. And I do not include tax deductions in my returns. I look at the real Cash Flow that will be deposited into my bank account. Of course, appreciation is great when it occurs. But I do not bank on it when purchasing a property. I will say, however, I've had two properties that I purchased with REI Nation appreciate more than expected, and I was able to cash-out refi within just a few years and get my investment back. Both were in Memphis suburbs.

Most of my properties are 3/2, 1300-1800 sq ft.

I scrutinize the neighborhoods probably more than the physical property.  I know its Class C property, which is good as that's what we invest in for cash flow.  However, I still want a safe community for my renters.  Nice and safe neighborhoods equal better tenants who stay longer, in general.  One of my best cash flowing properties with a long-term tenant is actually in Bartlett.  I do recommend that area, as well as Cordova.

I recommend carefully analyzing anything in Texas these days due to very high property taxes.  You really have to get high cash flow to make the numbers work, because the property taxes just keep increasing every year, especially in Houston/Harris County.  I still own in Texas from several years back, but property taxes can eat up your cash flow more than expected.

Thanks for sharing! Turnkey is one of the top choices for busy professionals who need to invest. As you get more experienced you might find you want to take a more active role or diversify beyond the turnkeys. Beware, cash flow is addictive!

@Dan T. You are likely overpaying and will start out with negative equity. Turnkey isn’t scaleable and buying 15-20 of them is not a good investment strategy in my opinion.

your Smart to be focusing on Nicest product possible not just what looks best on paper..

@Dan T. I have been investing with Memphis Invest / REI Nation for about 5 years and have had an outstanding experience. I can recommend them 100% for anyone looking to get into Turnkey investing. Even if you end up going with someone else on your next investments, you'll have the high standards of REI Nation to compare.

Congratulations!