All Forum Posts by: Willem Young

Welcomr and good luck!

One of the benefits especially for someone like yourself that lives in California, is that you are able to purchase a property that actually cash flows as a rental and still have all the pieces in place to manage the property.  We work with a lot of California investors and that is why most of them are looking into turnkey providers to start with. 

Another benefit is that you directly gain from the experience of the turnkey real estate company that has most likely down 100's or 1000's of transactions  but you have to make sure you're working with a reputable company.  There are  many moving pieces to real estate and it can be easy to miss things that will come back to bight you in the end.  One of the biggest pitfalls is a provider going cheap on construction work and not the right property management relationship especially if your out of the area.  It's tempting for providers to go cheap on a job and sell the rental at top dollar to a turnkey buyer that will end up costing the investor a lot of money through maintenance and repairs.  If your property management company isn't on the ball, you can have excessive vacancy times and maintenance that ends up costing a lot more than it should to fix.

Hope this helps.  Good Luck!

I am interested in good deals in Jacksonville Florida only right now.

We're not involved in Memphis but instead offer turnkey real estate investments in Chicago.   We have found that to be successful, you can't go by zip but rather block by block, street by street.  Especially if you're looking for a good deal.  I would agree with some of the previous comments that you need a strong team with boots on the ground and experience to work with to minimize the downside.   Initial construction quality and a good property management relationship is very important.  The cash flow can look great but especially with lower cost housing, you can get eaten alive by the maintenance costs without the right construction and property management relationships.  Hope this helps.

Congrats!

Got it.  Thank you

If this is your first deal, it should be an asset bringing on a partner.  Especially if the CPA is experienced with real estate and may have deeper pockets that are there to help if things don't go as well as planned.  Also, if you prove yourself, CPAs are often great sources of investors from their client base.

I agree with Aaron, definitely clearly detail the venture / partnership on paper. I typically create an LLC used to hold the asset and use the operating agreement to detail the partnership contributions and profit disbursement.

As far as division of labor, it is more common for one partner to contribute more money and be less active than the more hands on partner and split the profits in that manner.  Also, the loan and financials needed to get it is something to be considered in the venture if you're using a loan.

Traditional banks will be very difficult to qualify for unless they are underwriting your personal ability to pay more than anything. HML is the way to get started. There are some lenders that will underwrite based on 90% of the cost of the entire project with rates that aren't that bad. 8-10% rates. If the deal won't work with those kinds of terms, I would say it's not worth doing the deal.

BBB complaint, rip off report and get an attorney to start by sending a demand letter so they know you're serious.