Author Topic: Turnkey multifamily in Indianapolis IN?  (Read 5326 times)

Bearded Man

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Turnkey multifamily in Indianapolis IN?
« on: June 30, 2015, 03:02:22 PM »
Considering 10-31 exchanging some of my SFH rentals in WA state for turnkey rentals in Indianapolis, IN. Any good sites for turnkey multifamily in this area?

I'm investing for cash flow and by doing this I can increase my cash flow drastically over SFH, even SFH in IN.

Total returns (principal pay down, cash flow and appreciation if I were to count it for the sake of comparison) in my area is considerably higher than buying a paid for SFH in IN. But with MF, using leverage, if I buy four...

sammybiker

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #1 on: June 30, 2015, 05:26:55 PM »
Anyone who reads what I post knows that I'm not a fan of turnkey sellers as I really don't believe they provide the value they say they do and in the end, you're throwing all your eggs into one basket AND not gaining any equity (buying at market price, best case - paying over worst case).  That said - I had some decent conversations with Mike a couple years back when I was looking at the Indianapolis market.

He's another Cali based dude selling things out of State...but he has a decent reputation on BP and was pleasant and responsive via e-mail and PMs at BP.

That said, this is not a recommendation, just a starting point.

Mike D'Arrigo

http://www.fforward.in/turnkey-real-estate-pinnacle-investment-properties/

I invest in Ohio and setup a team while out of state and now operate things some 9000+ miles away.  I'm a WA state resident and would be happy to share what I've learned here, via PM, e-mail or skype.

Best of luck.

Bearded Man

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #2 on: June 30, 2015, 10:24:13 PM »
Small world. I'm also in WA. Thanks for the info, I might take you up on that. I have been a bit hesitant about the TK thing since I've only bought locally to date. You know the mantra; if what you're doing is working, keep doing it until it stops working. That said, greater Seattle area is getting too expensive again to cash flow well without putting more than 25% down, which in turn reduces your CoC return. I have to at least consider the options. I do love Seattle RE though for the bonus of appreciation.

sammybiker

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #3 on: June 30, 2015, 10:53:34 PM »
Sure, makes sense.  I keep wanting to buy-up in Spokane but I really can't see the numbers working there (much less Seattle!) and I'm of the same mindset...I should probably just stick to my Ohio SFH which cashflow quite well, not to mention equity earnings after the renovation.

Johnny Aloha

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #4 on: July 01, 2015, 12:20:13 AM »
I also looked at Indy for a while, talked to several TK companies, but just couldn't bring myself to do it for the reasons Sammy lists.  Obviously, your due diligence will make or break you.

arebelspy

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #5 on: July 01, 2015, 10:26:41 PM »
I'm also a big advocate of building your own team (and also from WA).  Even if you screw up some, you'll probably still come out ahead of doing it turn key, and each subsequent investment will be better and better.

Good luck! Let us know how it goes (or if you do find a good turn key company).  :)
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CashFlowDiaries

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #6 on: July 02, 2015, 11:51:52 AM »
Turnkeys can absolutely be good if purchased right and you are super picky about what you buy and who you work with.  I have 3 turnkey rentals in Indy and getting awesome returns on all of them.  It hasnt all been peaches and cream getting to this point but its been a great ride so far.   I can tell you first hand from visiting Indy and talking to all my indy investor friends and contacts that I would not own a multi family there.  The single family houses rent for almost the same amount as multifamily.  The only differences is the quality of tenants you get in multi is worse.  In my opinion, I think it will only bring you more headaches then its worth.   In Indianapolis, I would stick with single family homes. 

But just make sure you do all your research, Im sure if you have the right team in place it can be profitable.  Send me a PM and ill give you intimate details about all the turnkey providers I have spoken to in Indy.  And for the record, I would not work with Pinnacle based on personal experience.  I see someone recommended them above.  I dont want to bash anyone online so I wont go into details about it here.

Like i said, send me a PM if youre interested.
« Last Edit: September 23, 2015, 03:20:01 PM by CashFlowDiaries »

Done by Forty

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #7 on: July 02, 2015, 03:25:24 PM »
We have two single family rentals in Indi that we purchased through a turnkey company. I think we simply got lucky of being with a good company, rather than saying we had it all figured out. They rented at or above what we were anticipating, no real problems with renters other than the occasional maintenance.

Our current attempt with a new turnkey company in St. Louis is proving to be very frustrating (construction is taking months longer than originally planned).

In general, while I like the returns and cashflow, at this point we won't work with a turnkey company unless we can get a reference from someone we know (e.g.- another FI blogger who has similar goals).

sammybiker

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #8 on: July 02, 2015, 06:15:37 PM »
As CashFlowDiaries mentioned...I would not ever buy turnkey multi-fam/operate multi-fam out of state or even with a property manager (unless you're going 40+ units and have a dedicated PM ORRRRRR you're buying very high end multi-fam).  Prop mgrs are not setup to deal with the high vacancy/turnover that you typically see with multi-fam.

Single family all the way for out of state.

Kriegsspiel

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #9 on: July 02, 2015, 07:23:38 PM »
I'm also a big advocate of building your own team (and also from WA).  Even if you screw up some, you'll probably still come out ahead of doing it turn key, and each subsequent investment will be better and better.

Good luck! Let us know how it goes (or if you do find a good turn key company).  :)

I'm guessing your strategy was to find a city with good valuations, and you put together a team to rule that city, right? It seems like finding good markets, THEN finding new realtors, contractors, and PMs in that market would be pretty risky. Is that what you did?

arebelspy

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #10 on: July 03, 2015, 01:23:24 AM »

I'm also a big advocate of building your own team (and also from WA).  Even if you screw up some, you'll probably still come out ahead of doing it turn key, and each subsequent investment will be better and better.

Good luck! Let us know how it goes (or if you do find a good turn key company).  :)

I'm guessing your strategy was to find a city with good valuations, and you put together a team to rule that city, right? It seems like finding good markets, THEN finding new realtors, contractors, and PMs in that market would be pretty risky. Is that what you did?

Yes, I start with my market and then build my team there. Why would that be pretty risky?
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

Kriegsspiel

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #11 on: July 03, 2015, 07:03:14 AM »
What I meant was that you'd have a lot of baskets if you did that a lot, so multiple chances to mis-judge someone. Like, you throw down a lot of money to buy a house, some person under-estimating repair costs, or whatever, can add up to a lot of dollars that you weren't expecting. Oh hell,  I don't even know if I would BE nervous trusting other people to find fix and manage some real estate that I can't stop by and see. It seems like the thought of it sounds more sketchy than actually doing it. I'm still rehabbing my first rental, so I'm still new to the real estate game. I think I underestimated the repair cost on that one, so why would those "extra" costs would be unacceptable if they happened with a house in a city that isn't around me... I'm just thinking out loud here.

iamlindoro

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #12 on: July 03, 2015, 07:19:22 AM »
I think I underestimated the repair cost on that one, so why would those "extra" costs would be unacceptable if they happened with a house in a city that isn't around me... I'm just thinking out loud here.

Unless you are a general contractor by trade, this shouldn't be something (IMO) you should let bother you.  In fact, it's the same reason ARS has mentioned in the past that investing without visiting the property is ok with him.  With a trusted team in place, you're relying on the subject matter experts to evaluate the physical condition of the property, not relying on your (and my!) gut-level instinct which may be skewed by your own expectations for a property you would live in.  Repairs are actually one the easier elements of a purchase to get right, as you can get an inspection (from a disinterested party) and then multiple bids on the identified work.  Obviously if you get into a complete gut rehab, the chance that you will find something you don't like inside a wall (or structurally, or...) increases, but you don't necessarily have to choose properties that need full gut rehabs, either.

What has been harder for me than repairs has been finding trustworthy property management and buyer's agent, but even that hasn't been hard, it's just been legwork (leaning heavily on Bigger Pockets and checking lots of references).

sammybiker

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Re: Turnkey multifamily in Indianapolis IN?
« Reply #13 on: July 03, 2015, 11:15:34 PM »
My view...

What I meant was that you'd have a lot of baskets if you did that a lot, so multiple chances to mis-judge someone.   vs putting all your money in one basket (turnkey) and misjudging?  Then you're really screwed.  My team members are not all interconnected...one fails, I fire him/her, they know this, and life moves on.  My balls aren't in a clamp of a turnkey provider who a) found the property b) renovated the property c) found the tenant d) manages the tenant f) maintains the property, etc....I prefer an even distribution of my risk, not to mention being hands on in picking the people I'm going to work with individually.

Like, you throw down a lot of money to buy a house, some person under-estimating repair costs, or whatever, can add up to a lot of dollars that you weren't expecting.  Oh hell,  I don't even know if I would BE nervous trusting other people to find fix and manage some real estate that I can't stop by and see.  This can happen on properties right down the street from you or even on properties that you do your own work on - always risk there for cost overruns, bad estimates, unforeseen repairs, etc   

It seems like the thought of it sounds more sketchy than actually doing it.  This is the truth (and the truth that most turnkey sellers don't want anyone to know!)

I'm still rehabbing my first rental, so I'm still new to the real estate game. I think I underestimated the repair cost on that one, so why would those "extra" costs would be unacceptable if they happened with a house in a city that isn't around me... I'm just thinking out loud here.  I've run over and I've run under budget on renovations...shit happens and especially on major renovations, you're not boroscoping walls - eg sometimes you really don't know what you're getting into until you're into it.  Is this risk increased by being out of state?  Sure.  Is that risk manageable and worth it?  Yes.