All Forum Posts by: Jon Horton

Hi @Kusmayadi Djunaidi

I have worked with a couple of Turnkey providers and ended up doing my deals so far with just one provider.

My goal in using them was to get my feet wet, learn through active investing and make some connections.

My experience has sky rocketed my learning curve on a personal level and real estate investor level. Not knowing your experience level, I highly recommend that path for the newer investor who is operating with limited free time but wants to get going. It will not be the highest return on your money financially but it can be safer way to actively learn as long a you work with the correct Turnkey provider.

My advice would be to trust yourself, don't be afraid to say no and be very open to listening to what they say and then find a way to validate the information provided.

I have not worked in Ohio nor have I heard anything about American Wealth Builders.

Best of luck!

BREAKING NEWS - I discovered that the 3 units cash flow is not truly the same as the 6. 

Actual numbers, based on financing with the same cumulative amount of cash down needed for both deals (approx $160K):

6 units - cash flow $215 each per month ($1290 total) after PITI, vacancy, maintenance, PM

These come with equity (based on appraisals) from Day 1

3 units - cash flow $265 each per month ($795 total) after PITI, vacancy, maintenance, PM

These come with zero or negative equity from Day 1

hmmmmmm

NEWBIES PLEASE READ THIS CAREFULLY:

Both of these deals are from Turnkey providers.

Both providers did provide me all the data. (Defensive mode here) The difference in the initial perception of the deals stems from the presentation of the data to me. Period. Then my lack of experience to quickly identify the flaws and my eagerness to get going almost cost me.

3 units deal initially presented me with a higher cash flow amount in a bold font based on not accounting for maintenance and vacancy. When I saw that was missing and then found the numbers (further down on the sheet and not bold) with maintenance and vacancy included in the accounting, I let it sink in my head. I was disappointed (thought I had a great one!) but was ok with it. Then I looked even closer and saw the down payment used in the calculations was approx $52K, the light bulb in my head finally started shining brightly. I put on my big boy pants and turned down the deal (I had already told them I wanted it). The back and forth about it with the provider's sales person was not pleasant but the correct decision was made and executed.

Again, all of the above information was provided to me. However, it was not highlighted but was rather placed further down in the presentation and not in bold font like the higher cash flow number was and in my mind, that is deceiving.

There are some positives that the 3 unit deal would have brought - greater potential for appreciation based on the location in the US, longer term for tenants, very mature PM team and process. For some investors, that might work out. For me, it does not.

Now it is time to continue the portfolio building...

@Scott Weaner That is one of the things I am pondering. With property management in place, would that affect the decision? I make the presumption that a quality property management company exponentially reduces my hours of overseeing effort required thus freeing me up to find where my not yet fully determined best skill set is best utilized. 

@Jacob Blackett The 3 rentals are about 3.5 hours away. The 6 are out of state about 10 hours away. And yes, these are my first rentals so I am trying to wrap my head around the pluses and minuses, risks vs rewards, etc.

I truly appreciate your offer to help. 11 in a month? I am seriously considering adding you to my top people to watch list :-)

A little but of further clarification. 

These are all SFH. 6 cash flow $200 per month. 3 cash flow $400 per month. Less money down per deal on the 6 than on the 3 but total cash in is the same amount. Interest rates on the loans are the same.

Different property management is in place for the 6 vs the 3 but equal quality although 1 Is 1% cheaper per month and that has been accounted for in the cash flow calculation. 

What should I or what would you consider when deciding which route to take?

If the cash flow was the same and out of pocket amount the same, what factors would assist you in determining whether or not to buy 6 rentals or 3 rentals?

I understand and agree on the 50/50 split. Do you have a standard written agreement that is executed on every deal? Like if I partner with person A only 1 time, would I have a written agreement between him/her and I? What if I partner with someone 3 times, is the agreement generic enough to use it for all 3 deals?

@James Wise I am seeing the various opinions and trying to decide what fits me best since I am number one :-)

@Larry Fried I appreciate your advice.

@Nancy Emineth Thanks for the nudge. I am talking with 3 turnkey companies tomorrow and hope to make a decision by end if week!

Hi all!

I have been trolling here and am loving the 50 foot view perspectives. I have a full time career but am looking for passive income as I gear up for retirement. 

I am 51 years old, have studied REI and am intrigued but I have not yet taken action and it is driving me crazy. I know if I dont take action, nothing will happen. The fear of the unknown and fear of losing a lot of money can be debilitating so I have to get past that thus I am looking for a simple launching deal. I am not looking for the homerun. I want this journey to be a marathon.

I am thinking turnkey is a good start. Many posts here have strong opinions on the subject and it has my head spinning some. I would really like to connect with people who have that experience and references to help a great guy (me) get slightly off the ground and moving forward. I will reciprocate in any way I can as soon as I can as I love to help those who have a passion but need some guidance.

Thanks for reading this!

Jon in Texas