All Forum Posts by: Paul Sverdlin

Turnkey isn't dead. As an investor I am actually working with a couple of providers right now in Detroit. However, I do find that in general in many instances turnkey is selling at price point where all the profit is going to the turnkey providers these days.

Say the property is purchased at $100k. ARV is $160k with a $30k reno. It may seem like there is $30k equity in it. In practice the provider entered into the purchase agreement, wholesells it at $125k to the investor, renovates it for $30k+ takes $5k to oversee the renovation, and voila - the property ends up costing the investor the same $160k that it appraised at. No wonder we go for realtor-contractor-PM self-help way rather than blindly trusting a one-stop-shop to make the most for us. Leave enough meat on the bone and investors will follow. Imho.

 Same here. Any recommendations from personal experience?

Hello fellow investors. Looking for your views on the area between Hemet and Temecula. Lots of acrage, not much for sale. Would rehabbing and flipping  some of those property with larger land plots be profitable in your view? Is this are in demand at all? Specifically considering zip 92544.

Much appreciated!

Invested in Columbus for 12+ years while remaining in Toronto all along. DM if you want to chat about that market.

Hi Mark, apprecitiate you sharing the question for the broader discussion. I too have attempted to find parterns for deals and played with JV allocations to get this to the right place... and its still a work in progress.

The answer seems to be in the amount of marketing you are willing to put out there. An example I am aspiring to is a social media "persona" developed by Matt Piche (aka Fruitful Invesor) from Waterloo who had build quite a business partering up with people. He is now in Florida doing the same. No affiliation here, I just admire the guy. Check out his videos on how to target potential partners, how to perk up their interest, how to get people excited over working with you, etc.

At some point I connected with Matt to learn about his actual numbers. He offers partners mid-single digit returns after everything is done and counted properly. However people are happy to take it. They probably don't even realize their return is low, they are just happy to invest passively in real estate, be part of a "deal" and magically make $50,000 after locking up $300,000 for 5 years. They make money and learn how to invest. Works for them!

However these types of low-return deals are not attractive to an average friend of mine. To risk their money going into a multi-year deal they usually need 12-15-20% cash on cash, in which case I don't need them in the deal as other forms of financing a cheaper. 

The answer seems to be in the marketing. The more and better type of content you publish, the more you talk about real estate as means to financial freedom and such - the more likely you are to find people who can partner up with low return expectations. At that stage you can literally just take their money, put zero of your own and give back X% of gains at the end. 

Try listening to Codie Sanchez on any social media platform. She specializes in what you seem to be after: buying up stable businesses for cheap, improving them, cashflowing and then repeating the process to keep expanding. 

Not affiliated in any way; I just connected in my mind your questions with her approach. 

Network with local agents, wholesellers, contractors (online, by phone, etc). Takes notes on which areas are good vs. not so good. Take it from there.

Great suggestions shared already by all of the earlier contributors. Our approach is to have 2x the typical monthly renovation budget as reserves. For example, we know that in our portfolio it is typical for one tenant to leave every month. That means a rehab has to take place, and at least 1 month of rent will be lost. A typical rehab is about $5k, lost rent is roughly $1k, for a total of $6k.

Keeping 2x that amount for the entire portfolio so far served us well. In the event of a major cash shortage we can tap into our investments, HELOCs, etc. Had not happenned in a dozen years. 

Hey Park. We self-manage. 10% fees will eat into your profits quite a bit. The key is to have a good realtor who helps to buy the property. An experienced realtor will have a list of contractors to recommend for any kind of maintenance issues. They can also help find a new tenant when there is a turnover (for a fee of course, but you'd pay that fee to a property manager either way). 

The only thing that you may need to do is to take that call-text-email from a tenant once in a few months. Once you understand what they need - just call up a handyman to go fix that problem and pay them. This is exactly what property managers do and believe me its not that much of a deal, especially if you have a handful or properties to manage. It gets busier with 10+ portfolio... which is probably not what you are worried about at this stage.