All Forum Posts by: Caitlyn Hummer

Welcome @Kathy Sun! You came to the right place to learn more about RE investing from pros. Turnkey investing is a perfect solution for someone like you = busy professional wanting to get started. Memphis Invest is one of the longest running turnkey providers in the U.S. I would recommend investing in at least 2-3 markets as you get started. Diversification is key. Real estate markets aren't national - they're LOCAL. One city/market may take a dip while another is on the rise. Spreading out your investments (a bit) is better than having ALL your properties in one pot. Good luck! Lots of great info here for you to sift through. 

Hi Mike! Mara Harperink is a well-known property manager in Cincinnati. Here is a link to her Facebook > https://www.facebook.com/redheaded.realtor You can try sending her a PM on there. She's pretty quick to respond. She will likely have an idea of handymen and contractors in the area that could work for you. I have guys and contacts in the Dayton area if you're ever in need there. Best of luck!

Hi @Aaron Gilmore. The greater Dayton area - and all the way south to Cincinnati - are great areas to invest in. West Carrollton is particulary a good rental area. Right now, I don't have any inventory in that area but we are always looking. Inventory is tight for everyone right now. Good luck!

I get the sentiment that "the best deals aren't listed." In our market, we rarely find any good deals listed on the MLS. Most acquisitions are through wholesalers we have a relationship with, Auction.com, and a few local agents who know what we're in the market for. We do look at some MLS deals but they're generally so marked up that our searches on there are far less than our other avenues.

One thing you may think about, if it's a cash flowing, turnkey type property, is finding a turnkey operation working in your market and see if they'd be willing to sell it for you. Of course there will be a fee. However, they will likely have a larger list of contacts to reach out to that will see this as a great investment (if it truly is). 

Does your city or county have a rent registry of owners? If so, and there are neighboring rental properties like yours, search for the owners or management companies on there. Contact them. If it's an owner, see if they'd be interested in purchasing or know someone who is. They already know the area and are comfortable investing there. If it's a management company, see if they have any owners they know that are looking to expand their portfolio. They may ask for a referral fee but it will likely be worth it if they can get it sold.

Of course if you're listing on the MLS, are you with an agent? Assuming you are. Make sure your contract allows you to sell it without paying them commission. You may end up paying a referral fee + commission fees to your agent if not which can make a dent in your bottom line.

Good luck!

@Kevin Moules If you're interested in the greater Dayton market, and you're planning a visit, I'd be happy to show you around. We're investing in areas just north of Dayton (Huber Heights) all the way south to Middletown (directly between Cincy and Dayton). 

@Brooks F. is right about the larger metro area. Both Cincy and Dayton are expanding towards one another. It's creating great RE opportunites even outside those proper city limits. And he is completely correct about commuters. It's pretty standard for almost everyone to own a vehicle and commute. I at one point lived in Dayton and worked in downtown Cincinnati. One hour communte, each way, in good traffic. But, it's not out of the question for many people. 

In Q4 of this year, we plan to begin operations in Cincinnati so we will be covering both major markets and all areas in between. 

Using turnkey rentals for passive income could be a great way to supplement income while you're working on your flips. Also just a great way to diversify your investments. As @Sean Carroll said, the midwest can offer some great returns. If you're looking to buy with cash, single families ranging from $68k-$99k can give you a 8%-12% return. If you get into duplexes and fourplexes, you can get 15% return. If you're working with financing, your cash on cash can go up to 20%. I'm just speaking specifically about the greater Dayton, Ohio area and the properties we've been working with lately. Not only are the returns better than most CA markets, these are high rent demand areas with growing infrastructure. Truly a great place to invest.

Some clients we work with visit before their purchase. Some visit after. If you're working with a reputable turnkey company, you may not need to visit. But as @Thomas S. said, I would always advise visiting your properties at least annually. Property managers will provide monthly reports and annual or bi-annual inspections. But it's always a good idea to see your investment and make sure it's up to speed with your threshold of acceptable and good. 

All in all though, it really can be passive income with little to no involvement. As @Caleb Heimsoth mentioned, our property management team customizes plans with clients. Some don't want to be contacted at all so they take care of minor repairs before the owner even knows about them. Some prefer more involvement. It's up to you. You can make it as "passive" as you want. 

@Lindsay Wyatt - Welcome! You've come to a great place to get information from a lot of different point of views. A midwest city that hasn't been mentioned yet that you may want to consider is Dayton. It's located about 45 minutes north of Cincinnati. I work for a turnkey company based out of Dayton and we've been able to get our clients anywhere from 8%-15% cap rates with single family and duplexes. We've even offered some fourplex options. Most of our clients live in CA and invest with us because let's face it - you can't get a home in CA for $100k. Just won't happen. Our goal is to expand into Cincinnati soon (by end of year). However, Dayton is proving to be strong with a 60/40 home owner to renter ratio. Definitely a market worth checking out that has a high demand for rentals. Best of luck and enjoy the journey! 

Dayton, Ohio offers great opportunities between $75k-$100k. Some duplexes are available just below $100k.  Great growth opportunity and the city itself is seeing the revitalization and growth many other mid-size American cities have seen over the past few years.

Some turnkey companies will offer properties in the 50s and 60s in the Dayton area. Don't go there. These have to be "war zone" D Class neighborhoods that you don't want to buy in for the long-term or it's a terrible rehab that is going to leave you with problems. 

Some cities between Dayton and Cincinnati (the 2nd largest city in Ohio) - like Middletown and Franklin - also offer great returns and have high renter percentages than other suburbs. 

Cincinnati is also on our radar to expand into. Just be careful. The west side of Cincinnati is likely where the most opportunities under $100k are. However, just a few streets can make a difference between low B/high C class neighborhood and super low D class area. 

Looks like you already got your answer @Gaurav A. Bad, bad investment.  As @Darrin Carey said, I would be worried about the quality of the repairs done to the properties. They're likely going to use the same contractors that did the bad repairs to begin with or worse - they're going to direct their contractors to skimp on the repairs. Either way, it's not good for you. Being a turnkey provider in Dayton, $50k is likely getting you a property in a "war zone" anyways. I know it sounds appealing to get a property cheap with some instant cashflow, but, just $15k-$20k more in Dayton can get you good B-C class neighborhood. Just something to think about if you want to invest in the greater Dayton market.

BRRRR models can be very tricky. Especially, as most commenters have already noted, you're not very familiar with the neighborhood and you're really having to tweak numbers to make it work. It's more of a hands-on model to real estate investing versus turnkey (which is what I do). With the BRRRR model, you're financing the rehab, carrying the loan (if there is one), and hoping it refinances at the price you want. Now I am not saying it's all bad. You're certainly going to find good companies out there that offer that. It just has more risk built in. (I really have no feedback or info on the ABC company you mentioned originally.)

With turnkey, as someone above recommended, it's done for you. 

Is there more to make from the BRRRR model? Maybe.

However, you can buy a turnkey property and still do the refi to buy another... and another... and another. 

If you are really educated in the rehab process, the BRRRR model may work. But if you want something that's done for you and cashflowing, turnkey is the way to go.