Hey BP Fam! First one was deleted. I'm assuming because I used links. Reposting now without them. Here we go...
After deciding I wanted to explore out of state investing, I spent the last week meeting with several "Turn Key" companies that I located thanks to Bigger Pockets. After multiple meetings/emails with most of them and further Due Diligence, I figured I'd lay out my opinions and some general information on these companies and the services they offer. I know many here want to be in Real Estate but would prefer a little bit more "hand holding." I believe each of these companies offers their own pros and cons to solving that problem for investors who are looking to be as "passive" as possible. Here are the companies I have connected with and done a fair amount of due diligence on:
REI Nation: I'd consider these guys to be a step up from something like Fundrise. You own the actual deed to the house, but outside of that they are really handling everything for you (at a price). They've got over 7,000 doors under management and are truly a one stop shop for an almost 100% turnkey Real Estate investing experience. I really like that they have their own in house management and are not relying on third party companies. Their whole operation seems very well vertically integrated, which I believe would make for a much more universally cohesive operation and investor experience. They sell you turn key, rehabbed and rented properties at (or sometimes a little above) market value with instant cash flow but zero equity at day one. You can expect to see 5-8% cash on cash returns from their deals after all expenses, management fees, debt service etc. The benefit here, unlike investing in a REIT or something like Fundrise is you have the advantage of a tangible asset purchased with leverage that provides cash flow, appreciation, depreciation and debt pay down from tenants. All in all, of the Turn Key options, I personally got an incredible vibe from REI Nation. Their management fee was 10% of rents collected if memory serves.
Rent to Retirement: Essentially the same situation as REI Nation except instead of in house management, they connect you with third party management in various markets. Whereas REI Nation earns most of their money on the management side of things, Rent to Retirement earns their money on the initial sale (when you buy the property from them). They take on all the risk buying distressed properties, rehabbing them, renting them etc. then you as the end buyer purchase a cash flowing property from them at market value. In my opinion, just like REI Nation the asking prices on their active inventory list are a bit steep, but I'm also not an expert in all these markets. For the service they provide and the ability to have a cash flowing property handed to you on a silver platter, the price may be well worth it. Additionally, Rent to Retirement is the only Turn Key company I've found that also offers New Construction opportunities where you have the ability to get in on the ground floor and take advantage of a potential equity capture prior to the property being built and rented. Their management fees were 7-8% of rents collected depending on the property type and they negotiate these fees with the chosen management company in each market. I'm currently doing some very thorough DD on their Cape Coral new construction opportunities and am happy to share what I've learned thus far for anyone interested. I also must say that Zach Lemaster has been very present here on the forums and also willing to pick up the phone and answer any questions I have about R2R, which I believe speaks volume to his desire to meet and exceed his investors' expectations.
The following three companies have a slightly different approach to the "turn key" model and are basically offering the same kind of service, but simply all in different markets. They work with you from acquisition (based on your desired property criteria), through the rehab process, leasing, and finally management or sale. What I like about these companies is they're not selling you a turnkey rental and charging you a premium. They're simply making money as your agent when you buy or sell and as your management company through the day to day operations. All three of these companies have their own in house management, which is always my preference if I have the option.
Evernest (Multiple Markets): I spoke with Hunter at Evernest and we immediately hit it off. We spoke for almost an hour and from start to finish I felt like I had known him for years. Very personable, very knowledgeable and also provided me insight on some Markets in FL since he grew up there prior to moving to Birmingham. Hunter filled me in on some personal deals he's done in Birmingham and why he believes it's a very strong real estate market. What I like about Evernest is that they're in multiple markets around the country and their management fees are tiered and incredibly reasonable. Management fees start at 8% of rents collected, but they also have flat monthly fee options starting as low as $89/month. After our conversation I am doing more DD on Birmingham as I believe it could be an incredible market over the next ten years (and I've now got a connection to an agent). I will also be exploring the other markets Evernest offers services in.
Boise Turnkey (Boise Idaho): I spoke with Corby at Boise Turnkey. He was extremely professional, personable and I felt his understanding of the market in Boise was extremely thorough. Their management fee is 9% of rents collected with no extra leasing fees or project management fees. Per our conversation, Corby did mention that Boise is not the best cash flow market, but an excellent appreciation market. I'd strongly consider them if you're looking to invest in and around Boise. I'm not sure this meets my criteria at this time as I really like to find a sweet spot between cash flow and appreciation.
Turnkey Invest (Memphis, Tennessee): I spoke with James at Turnkey Invest and even though he was 30 minutes late for our call he made up for it with his incredibly down to earth demeanor and friendly attitude. The vibe I got from James and Turnkey Invest was that they're running a wholesome, family oriented operation. He also mailed me a couple T-Shirts, a handwritten letter and a brochure with some additional details on their company and the market in Memphis. I thought this was an incredible gesture considering the postage alone was $10. Does it make me want to immediately invest in Memphis? Not necessarily, but if I decide I want to be in Memphis I know who I'm calling now because I can see James and his team go above and beyond for their investors. Their management fees are escaping me at the moment, but I believe they were between 8-10% of rents collected. James stated that Memphis can be a bit hard to navigate as the "good" areas are a bit all over the place and it really depends on the street. All in all, I personally feel Memphis could be a strong up and coming market and I'm strongly considering it and Turnkey Invest at this point in time.
As an active investor here in Western, NY who is used to self managing 19 units, I personally am leaning more towards companies like Boise Turnkey, Turnkey Invest or Evernest. I'd like to have more of an out of state "team" and not simply buy turn key properties at market value. I feel these companies provide a one stop shop with all the necessary boots on the ground that out of state investors would need to be successful. I am also very much considering the Build to Rent opportunities that Rent to Retirement is offering and have spoken with other investors who have had great success with this model. Granted, we've had an amazing couple years of appreciation (especially in Florida) that could slow down or have a correction, so I'm not breaking out my check book just yet.
That's all the information I have thus far. I hope someone will find value in this. If you have any questions, feel free to comment, message me, connect with me etc. I love meeting new people and encouraging them towards their goals. All the best, BP Fam.
