+1 on Arebelspy's comments on Bigger Pockets. Some of the articles these days are downright embarassing. Hiring the "business consultant" to shape up the site did not do Dorkin much good, in my view.
You can also read Jeff Brown at bawldguy.com and Marty Boardman at flippingphoenixhouses.com. I have talked to Jeff on several occasions and he's a wealth of information. His latest comments about the banks flushing out all the "subject to" deals when interest rates go back up are spot on. Marty helped me out on a vendor referral in an e-mail request. Both guys are well worth your time to read.
100% agree, and both those blogs are on my RSS feed (unfortunately both have also stopped blogging as much - Marty because I think he's busy, and Jeff has switched to 3-5 minute "fluff" videos). Anyone interested in real estate should add them to their reading list.
I've also spoken with Jeff and he's a very experienced individual. Wish he went back to writing articles on his blog.
And yeah, right now due on sale clause doesn't have much teeth, and I wouldn't worry about it for a few years, but because of it sub2 is not a long-term plan I'd build an ER around.
I do like the keywords alert change on BiggerPockets quite a bit, but sad where the blog has gone so far. Time will tell.
I live in Phoenix so I checked out Marty's Blog. Seems like a sharp guy but not a big fan of his strategy....
1. From what I can tell he doesn't seem to live a mustachian lifestyle, though I could be wrong about that...
2. I am not a big fan of the strategy of short term flip investors. Many short term flip investors are anti-mustachian at heart living lavish consumption driven lives (at least in my experience of the ones I have met) that can only be fueled by living in the vicious circles of more flips. They are driving up the price in the market, I believe artifially faster than it should at least here in Phoenix. One of his articles looked at ASU's research that in June 2012 30%+ of the houses on the market were getting bought by investors, and that is the % they can track. There are also small time investors that are buying houses to flip that don't show up in these numbers. I believe this high price change prices out the regular everyday home buyer that could afford a home and would stabilize the market long term.
Also he says he wants the market to increase to push out long term investors, like ME! Flippers can always make money even at the height of the bubble and he shows evidence of that. But for the local real estate market short term flippers aren't necessarily a good thing in my opinion at a point. The flippers can add value, but too a point where they are buying every house on the market I think the pricing increase becomes less stable long term.
Personally as a long term investor and someone who wants to live in Phoenix it is tough competing to buy a house with investors with cash to burn and ok with losing money on a house here or there. The point he wants the market to increase to is the point where it doesn't make sense to buy a house in Phoenix for a savy long term investor or home onwer...rewind to 2003 to 2008...and creates an unstable market for the Phoenix Economy.
Anyways I am through with my complainy pants part of the post.
Back to the post. I think a turnkey can be a win...say if you were to have bought a turn key in Phoenix a year ago... you would be buying low with strong rents and price appreciation. Even now you can find houses to rent with good Investment returns, but the rental market is going to start getting very competitive here.
Though I do agree with other posters you are potentially missing out on some return by paying someone else to do a job for you...and to be honest many of these short term flippers do shotty work and just make it look good cosmetically to get the thing to sell. Thus you may end up with more out of pocket costs than expected for repairs that seem like they have been taken care of