Real Estate Investing in Turn-Key Investment Properties - Part 2
In Real Estate Investing in Turn-Key Investment Properties Part 1 we discussed the steps involved to make a property turn-key and how utilizing a turn-key property provider may be the right solution for an investor to acquire rental property.
In this article, we will discuss 5 benefits to acquiring rental property from a turn-key property provider 1).
Buying Power: Turn-key property providers buy distressed properties (usually foreclosures) with cash and they have a strong relationship with the REO realtors/banks in their area giving them a head start on good deals as well as better pricing.
The really good deals in any market are often pending the very morning they come available for sale.
2).
Time Savings: As it goes, "time is money.
" With real estate investing, this has never been more true.
Turnkey property providers have teams and systems and the means to locate, purchase, rehab and rent a property quicker than most.
There are many overlooked time consuming tasks such as turning on utilities, recording transfer affidavits, ordering final water bills, attending closings and notarizing paperwork, pulling permits, etc.
All of these items are taken care of by the property provider.
3).
Market Knowledge: Turn-key property providers know what cities, streets, and even blocks are good and not good areas to invest in as well as what rental rates are.
They also know the types of properties that are most desirable.
For example, a 2 bedroom will not rent as well as a 3 bedroom.
A small kitchen will detract a tenant.
A house across from commercial or on a busy street will not be as attractive.
4).
Rehabbing Expertise: Perhaps one of the greatest benefits to using a property provider is their ability to renovate.
Managing contractors is no easy task.
Successfully rehabbing a property requires constant, almost daily attention.
Miscalculating the cost of a rehab is common.
A specialists is very knowledgeable about what it will cost to fully renovate a property.
They know the right labor and material costs for each item of the rehab.
They have a team of contractors at their disposal.
They know how to manage schedules so the rehab is completed quickly.
They know how to pay draws accordingly and how to hold back money until the final punch lists are completed, which is essential to keeping contractors motivated to finish the work 100%.
5).
Financing: With real estate investing in investment property, financing is often a major component.
Unless you are a cash buyer, financing is required.
Most lenders are unwilling to finance the purchase of a distressed property as well as the funds to perform the required repairs.
However, lenders will borrow on an already fully renovated property.
Today's programs typically require 20% down payment plus closing costs, allowing an investor to acquire property without having all the cash to purchase and renovate.
Be sure to read, "Real Estate Investing in Turn-Key Investment Properties Part 1 and Part 3
In this article, we will discuss 5 benefits to acquiring rental property from a turn-key property provider 1).
Buying Power: Turn-key property providers buy distressed properties (usually foreclosures) with cash and they have a strong relationship with the REO realtors/banks in their area giving them a head start on good deals as well as better pricing.
The really good deals in any market are often pending the very morning they come available for sale.
2).
Time Savings: As it goes, "time is money.
" With real estate investing, this has never been more true.
Turnkey property providers have teams and systems and the means to locate, purchase, rehab and rent a property quicker than most.
There are many overlooked time consuming tasks such as turning on utilities, recording transfer affidavits, ordering final water bills, attending closings and notarizing paperwork, pulling permits, etc.
All of these items are taken care of by the property provider.
3).
Market Knowledge: Turn-key property providers know what cities, streets, and even blocks are good and not good areas to invest in as well as what rental rates are.
They also know the types of properties that are most desirable.
For example, a 2 bedroom will not rent as well as a 3 bedroom.
A small kitchen will detract a tenant.
A house across from commercial or on a busy street will not be as attractive.
4).
Rehabbing Expertise: Perhaps one of the greatest benefits to using a property provider is their ability to renovate.
Managing contractors is no easy task.
Successfully rehabbing a property requires constant, almost daily attention.
Miscalculating the cost of a rehab is common.
A specialists is very knowledgeable about what it will cost to fully renovate a property.
They know the right labor and material costs for each item of the rehab.
They have a team of contractors at their disposal.
They know how to manage schedules so the rehab is completed quickly.
They know how to pay draws accordingly and how to hold back money until the final punch lists are completed, which is essential to keeping contractors motivated to finish the work 100%.
5).
Financing: With real estate investing in investment property, financing is often a major component.
Unless you are a cash buyer, financing is required.
Most lenders are unwilling to finance the purchase of a distressed property as well as the funds to perform the required repairs.
However, lenders will borrow on an already fully renovated property.
Today's programs typically require 20% down payment plus closing costs, allowing an investor to acquire property without having all the cash to purchase and renovate.
Be sure to read, "Real Estate Investing in Turn-Key Investment Properties Part 1 and Part 3
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