All Forum Posts by: Forest Skufca

@Jon Schwartz

Absolutely on point!

The two most important metrics for a long-term successful market is population growth and job growth - which result in real estate growth.

While appreciation does not directly increase your cash flow, the demand for real estate - which fuels appreciation - does directly impact your cash flow through annual rental income growth.

In a high-growth market like Austin, or Dallas/Fort Worth, the ability to increase rent is higher than just about anywhere else on the country.

Then, as you mentioned, if it does indeed appreciate, you have the option of Refinancing or taking advantage of a 1031 Exchange to pull the capital back out.

@Phaedra Culjak

You are in a great situation with that amount of equity in your property.

I 100% agree with the recommendations of the 1031 Exchange.

There are great benefits involved, and with lower interest rates in the present market, now is a great time to invest and, more importantly, diversify your portfolio.

I would encourage you to reach out to a team that regularly handles these situations to get their professional advice on what does or does not qualify for a 1031 exchange. You don't want to go into the situation assuming one result and finding another.

Feel free to reach out to me directly as well. I'm happy to help in any way I can!

Hey @Monica Sutton! First of all, congrats on taking your first steps to financial freedom! This is an exciting time for you!

I want to be transparent that while I do work for a turnkey company, my first priority is helping you achieve your goals - whether that's turnkey, BRRRR, or house hacking. If our company has the privilege to help, great! If not, also great! Because at least then you are confident in your next step and on your way to achieving your goals and I've had the opportunity to be a part of that.

All of that said - I've had several conversations with first-time investors weighing the options of investing. What I've noticed is that it all comes down to one underlying factor. Time. The ultimate goal of most of the investors I talk with is increasing cash flow to supplement (and eventually replace) their income and earn back their time. Some of them want to build wealth while they work their primary job (passive). Others want to work towards making real estate investing their full-time job (active). It all comes down to what's most important to you - your time or your money. That's the difference between an active investor and a passive investor.

As for potential cons, there can be several. You might not be managing properties or managing a renovation, but you will be managing your turnkey company. You're responsible for holding them accountable to hold up their end of the deal. You purchased a property from them because they showed you numbers on paper that looked great to you. Now, they have to deliver. There are a few things you can do to dwindle down your list of potential companies. First of all, every great turnkey company should do these same four things as a baseline:

1. acquire the properties themselves
2. renovate the properties to address potential capital expenditures
3. provide in-house property management
4. provide great in-house customer service and support to you as the client.

It's the details within each of these four things that separate good companies from great ones. What kind of houses do they acquire? How deep does their renovation go? Do they offer a guarantee on the performance and maintenance of the property? How efficient are they at communication?

The key is - You have the leverage! So, ask questions! It shouldn't be a sales pitch - it should be a relationship.

@Michael Malmrose No problem at all! Let me know if you have any additional questions. Happy to help!

That's a great point as it definitely can be. It really comes back to how active of an investor you are, and the amount of trust established between you and the company. Not that I am recommending you purchase a property site unseen, however, it's not uncommon within the turnkey strategy.

There are also many benefits to investing in multiple markets as part of diversifying your portfolio. Take the Dallas market as it compares to Memphis. Memphis is one of those markets that has a lower buy-in and steady economic growth. It's not a booming market, but it's consistent. Even when the housing market dips, Memphis has been quite resistant to the rest of the U.S. In Dallas, there's a bit of a higher buy-in (although great opportunities can still be found further into Fort Worth and other suburbs of Dallas), and there are higher property taxes which impact your cash flow.

However, a large majority of those high property taxes in Dallas are fed back into the public education system. When you invest in the education system you stimulate the cities potential for future economic growth and job growth for years to come. While you may look at year 1 of an analysis and think a market like Memphis outperforms Dallas, you aren't able to see the bigger picture. After a few years, you'll start to see that your returns begin to surpass and drastically outperform the Memphis property you purchased at the same time.

Does that make Dallas better than Memphis or other markets? Not at all, it's just simply a different strategy.

If you were to prefer to keep everything in one market that is all well and good - I just see the long-term benefit in diversifying across multiple markets as well.

@Michael Malmrose First, welcome to BP and congrats on taking your first steps to gain financial freedom!

I've read a few comments mentioning Turnkey as a viable option. And, they are right, but I want to help you understand why. For the BRRRR method to really work, the property still has to cash flow. Let's take your "undesirable areas" for instance. At a buy-in of $260k, you would still need to rent it out as close to $2600/month as possible. And that doesn't include your real cost if there are repairs needed on those properties.

In most cases, a lender will want to see that the property will rent out successfully for up to 6-months before they agree to refi. So, if there's any kind of renovation needed you could potentially be in the property for up to a year before being able to pull your capital out and start again.

Additionally, the kind of tenant you acquire in those undesirable areas won't likely take care of the property, or pay on time, or even pay at all.

I imagine the likelihood of renting out homes in the nicer neighborhoods at $4k/month is pretty unlikely, which makes your ability to cash flow positively even more difficult and pretty well rules out those neighborhoods.

With a turnkey solution, you have the option to invest out of state in growing and thriving markets. If you were to finance the purchase you could use $200k to invest in 4-5 properties in different markets thereby diversifying your portfolio and generating $1600+/month in truly passive income at leveraged cash on cash returns above 12% and higher.

It all comes down to your true goals and what's most important to you - your time or your money. That's the difference between an active investor and a passive investor.

So, to answer a couple of your questions directly:

• I don't think it would be easy to make this work in your market with the information you've provided
• You could absolutely invest out of state IF you partner with a great Turnkey provider.

At the end of the day, you have several options. But, the main goal is financial freedom. That said - it's important to invest in strategies that truly help you achieve that.

Please don't hesitate to ask other questions! I'm always happy to help!

Hey @Alex Gerasimenko! Welcome to BP and thanks for sharing your story and current situation.

I think you are in a great position to make a move on some great deals in your area. I have a couple of quick questions for you, if you don't mind!

1. Are you open to investing outside of Austin, TX?
2. Are you open to a Turnkey solution?
3. What are your long-term goals?

As you can see, I work for a turnkey company, however, I'm more concerned with helping you to achieve your goals - so, if discover turnkey isn't for you, that's 100% okay! At least I've helped you in narrowing down your strategy.

One of the markets we operate in is the Dallas/Fort Worth area which has some great single-family opportunities still available - primarily in communities just outside of Dallas. With $60k, you would have more than enough to invest in a fully renovated turnkey solution that also provides great cash flow in a thriving market.

There are many different solutions. Turnkey is only one of them. But, it does allow you the opportunity to begin building your wealth passively. It really comes down to what's most important to you - your time, or your money.

Let me know if you have any additional questions! I am more than happy to help in any way I can!

You're welcome! Paying off debts is a great first move, and $10k/month is a powerful goal! I love that you already have a number to attain. Now it's all about how to get there!

I can't speak for other turnkey companies, but, I do know that a great company should do these four things: They should acquire the property themselves (vs brokering the sale), they should renovate the property to address potential capital expenses, they should manage the property, and they should provide in-house support to you as the client. These are all things we do.

As you can see, I work for a turnkey company, but I believe helping people achieve their goals is more important than saying "Ours is the best and only one offering these services." There are tons of great companies available that do these four things. It's the details of how they do each of these four things that separate the good companies from the great companies.

I would simply encourage you to reach out to several and see what they have to offer, and I would love the opportunity to be one of those companies. If we aren't the right fit, that's fine! At least I've been able to help you get closer to achieving your goals.

Feel free to send me a PM so we can talk further!

@David Mills First, welcome to BP! Not sure if you've already begun your real estate investing journey, but if not, congrats on taking the first steps!

The best advice I can give you is RESEARCH, RESEARCH, RESEARCH!

There are a ton of turnkey companies in markets all across the country, and not all are going to accomplish your goals or offer the same benefits. Roofstock is driven by an algorithm that can be debated as to its true success. But, they don't manage the property. It's also a mixed bag of properties and you don't really know what repairs could be on the horizon.

It really all starts with you and your goals. What are you looking to achieve? What markets are you interested in? What is your available capital? What is your strategy? Some like Cash Flow, some buy for the appreciation. Each market can offer something unique that speaks to your strategy.

Then you have to find a company that meets those goals and find out what they offer you in return. Some will guarantee the rent/maintenance as part of their management of your properties. Some do higher-end renovations to address major capital expense items. Some are in lesser-quality neighborhoods which impacts your potential vacancy, maintenance on the property, and overall quality of the tenant.

The great news is, you have the leverage in these conversations, so take your time to find the best one for you!

Let me know if you have any questions! I'm more than happy to help!

@Jason Theus First, welcome to BP! Not sure if you've already begun your real estate investing journey, but if not, congrats on taking the first steps!

The best advice I can give you is RESEARCH, RESEARCH, RESEARCH!

There are a ton of turnkey companies in markets all across the country, and not all are going to accomplish your goals or offer the same benefits.

It all starts with you and your goals. What are you looking to achieve? What markets are you interested in? What is your available capital? What is your strategy? Some like Cash Flow, some buy for the appreciation. Each market can offer something unique that speaks to your strategy.

Then you have to find a company that meets those goals and find out what they offer you in return. Some will guarantee the rent/maintenance as part of their management of your properties. Some do higher-end renovations to address major capital expense items. Some are in lesser-quality neighborhoods which impacts your vacancy and maintenance on the property.

The great news is, you have the leverage in these conversations, so take your time to find the best one for you!

Let me know if you have any questions! I'm more than happy to help!