All Forum Posts by: Lei Z.

@Lei Z. I think you've made a good decision by selecting Indianapolis as your starting point. I just want to make sure you have the right expectations on forcing equity though. I don't know how you define a light/cosmetic rehab but generally, I light rehab isn't going to create equity if all it is is sprucing it up with paint and carpet. To really create equity, you're usually looking at making much more improvements. 

@Lei Zhao

Hello Lei

Like you I’m an OOS investor in Indy

I've 4 SFH as of now, closing soon on the 5th

Glad to help to share with some of the good people I had the pleasure to work with so far.

Send me a PM

Graz

As a broker I have used them on some deals, the rates are good but they  underwrite more like a traditional bank so it takes longer.  Plan on 45-60 day close. And they tear you apart if you documents are dirty.  They will fund and close

I have also used corevest as a broker, mixed results.  First couple deals i did went thru no problems, 20 day close. Next couple took forever, I think it all has to do with the underwriter with them and work loaded.

We mainly use a local hard money guy for most our stuff because he can close in 2 weeks. Rates are higher and closing costs but speed sometimes is the key.

We tried Lima One and a couple others and never got a loan to close.  So i always ask the client:

Pick 2 items you want: Speed, rate, Terms, Closing costs

Can't have all 4 with investment property unless you are grade A paper with no issues.

If your grade A paper, send it to Fannie thru a broker, you can get great Rate, Terms, closing costs- but speed is 45 days.

Is it realistic to live on $3000 per month? What if half your rentals go vacant during a downturn (or virus)? Will you need to pay for health insurance? Etc. 

@Christina Tkacs you asked about "getting ahead", and I think the important question is, get ahead of what?

There's really no free lunch in investing. But the more time, energy, mistakes, and learning you're willing to put into the process, the more you can "get ahead".

Any investment requires due diligence. Even buying an S&P index fund (which has done fantastically over the past decade) really should be approached with caution and due diligence as it may not continue to perform very well in the next decade. But a 60/40 stock-bond portfolio is probably one of the most passive investments you can make with reasonably good expectations of success.

After my first month in digging into all this, it seems to me that good TK properties provide a really outstanding risk-return profile compared to other passive investments like stocks. They require a bit more due diligence and networking than buying an index fund, but it's a solid way to build long-term wealth. Especially when combined with investments that perform well in markets where real estate will not perform well.

Sounds to me like BRRR is significantly less passive than TK, but may be able to provide even better returns if done right.

So it depends on what you want to get ahead of. You can probably get ahead of the returns from turnkey by educating yourself and putting in the sweat to learn brrr or other real estate strategies. You could probably "get ahead" of the time spent on even turnkey with a vanguard fund. 

I expect there's a good sweet spot for everyone here and finding your sweet spot is the most important thing. 

(btw I love this discussion! Thanks for the great advice ya'll!)

 Turkey is a great place to start says the TK provider and the property manager.  LOL   Barbers also recommend hair cuts.

Paying retail / appraised value makes you a buyer.  Investor's capture equity at the buy.

Paying retail for a turnkey product is fine for those that realize the trade-off.  You are eating at a restaurant. It's all prepared for you.  No planning. No effort. 

Equity capture requires more work.Now eating means you have to grow it or go to the store, plan it, prepare it and clean up.   

Which strategy is more effective depends on the person.  I don't have a job and haven't for a long time because I spent the time growing my food early on while others went to the restaurant. It wasn't an accident.  

Someone with a demanding job and or busy family life maybe can't do it any other way. Just know that paying retail will keep you needing that job, like it or not. It's the equity capture that moves the needle enough to matter.

Down payments won't change much, but having equity sooner will accelerate the velocity of your dry powder.