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Archive for December 2017

Why Should You Buy Investment Properties In Memphis

Memphis Investment Properties

Real estate investors who are looking to buy Memphis investment properties will not be disappointed. After the devastating blows of the real estate bubble bursting, Memphis has taken its time getting back on its feet. Today, it is a booming area ripe with opportunity for Memphis real estate investors with over 4,340 homes for sale, and 1,300 turnkey rental properties in Memphis, Tennessee. The one caveat for investors looking to close a deal of investment properties in Memphis is simple, act fast. Memphis investment properties are not only affordable, the demand is also on the rise, making Memphis a hot real estate market for investors of any level.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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New 2018 Tax Law Impact on Real Estate Owners

Congress has approved sweeping tax cuts and tax reform that have not been tackled by the federal government in over 30 years (since the Tax Reform Act of 1986.). The new tax law, formally referred to as “The Tax Cuts and Jobs Act,” will go into effect on January 1, 2018.

This article has the most up-to-date information along with a summary of how the new tax law provisions will affect homeowners and real estate investors who own all types of investment property. Although this article generally does not delve into tax issues not associated with real estate, there are many new tax provisions and this is essential information for anyone that owns real estate to understand.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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How Investing In Rental Property Works For Beginners

Investing In Rental Property For Beginners

Investing in rental property means buying a property that can generate an income in the form of rent. There is no doubt that investing in rental property for beginners can be a great way to generate positive cash flow every month. However, many people still find it challenging due to expenses typically associated with traditional real estate investments including property management and renovation works. It is a well know fact get started in real estate investing can be very tricky and overwhelming. In recent years, the solution to this problem has emerged under the so-called turnkey rental properties. Why did investing in turnkey rental property become so popular? The answer is because, on top of all of the advantages it entails, investing in rental properties offers an ideal solution to investors biggest problem: Headache. Turnkey rental properties allow investors to sit and enjoy their passive cash flows while someone else does all the hard property management work for them.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

The post How Investing In Rental Property Works For Beginners appeared first on Real Estate Investing Blog.

Advantages of Buying Turnkey Rental Properties

Advantages of buying turnkey rental properties are many especially for new buyers. Turnkey rental properties provide investors with a chance of experiencing high return on investment due to numerous advantages associated with the built-in defenses which provide security. Turnkey properties are also great real estate investment vehicle for investors who want a long term sustainable passive income without any hassle. These defenses operate as anti-fluctuating tools against the economic cycles. The biggest advantage of buying turnkey rental properties is that the cash flow starts from the first month onward, which is generally not possible in any other type of investment. A turnkey rental property is a good source of income to own because it provides a quick return on investment and a stable income with no work to be done by the owner of the property.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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Why Cheap People Will Never Get Rich

The other day a friend of mine approached me excitedly, saying, “I found the house of my dreams. It’s in foreclosure and the bank will sell it to me for a great price.”

“How good is the price?” I asked.

“Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?” she asked.

“How would I know?” I replied. “All you’ve given me is the price.”

“Yes!” she squealed. “Now my husband and I can afford it.”

“Only cheap people buy on price,” I replied. “Just because something is cheap doesn’t mean it’s worth the cost.”

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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How To Finance Turnkey Rental Properties

Financing turnkey rental properties is the most difficult question to solve for a buyer with no experience in the real estate market. We all know that in a real estate investment “cash-is-king.” But, if an investor does not have that much cash in hand, finance is definitely required to meet the purchase price of an investment property. There are many options available to finance turnkey rental properties. Among them non-recourse loans, hard money loans, and private loans are mostly popular. In conventional mortgage, the down payment is smallest and the rate of interest is also lower. In case of Non-Recourse Loan the investor puts an asset forward. But, let us first discuss what is a turnkey property.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

The post How To Finance Turnkey Rental Properties appeared first on Real Estate Investing Blog.

Tax Bill Signals Big Gains For Real Estate Market

In the wake of Republican-led tax bill being pushed through the house and senate in rapid-fire fashion, commercial real estate is poised for big gains.

Though there are some disparities between the current House and Senate versions of the bill, it looks like the commercial real estate market will fare better than the residential real estate industry.

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© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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How To Buy Turnkey Rental Properties

Turnkey Rental Property

When it comes to real estate, you’ll find widely divergent opinions about its importance in an investment portfolio of an individual. Investing in a turnkey rental property is among the best investments you could make today in the US real estate market. The value of your turnkey rental property may increase to make it profitable for you to flip it in the future . But having said that, a turnkey real estate investing does require a lot of research, planning and hard work to make the purchase a sound investment. With turnkey rental property investing, you do no buy such properties and hold them until you could sell the properties for profits. You buy them for a passive rental income and expect to get a ROI over the years to come. However, you can always flip a rental property after a few years for a lump sum profit making. This article will guide you on how to buy turnkey rental properties.

A turnkey rental property generating positive cash flow can be a great investment to add to your real estate portfolio of income properties. The income is completely passive which means once the deal is over, you get a steady rental income month after month. Contingent upon your location, it may be difficult to locate a rental property that produces month to month passive income. You may likewise find that the most ideal way for finding a decent income producing rental property is to purchase a fixer upper, after that do all the rehab needed on your own and lease it out to a qualified tenant. This can be an extremely tedious undertaking and if you have a full-time day job, it will make it much harder to do so. If you are a novice investor, you are bound to make some common mistakes which could lead to a serious downside in the turnkey property investing outcome.

There is lot of misinformation out there which could lead you to a negative cash flow generation. However, a good aspect concerning purchasing a turnkey property in 2018 is that it removes a great deal the diligent work required when needing to get into rental property investment. It will be a rewarding investment if you add turnkey rental properties to your portfolio. Investing in a turnkey rental property can increase your monthly passive income.

Here are some essential tips to help you achieve this investment goal – how to buy turnkey rental properties. These tips have been proven to be productive and rewarding for a passive real estate investment.

CHOOSE THE BEST MARKET FOR TURNKEY RENTAL PROPERTY

If you have your eye on a turnkey rental property investment, it’s most common that you live in a place where you can’t find the excellent cash flow meant for rentals. First, you have to locate a city where you can buy in. It is vital you do proper research to pick the perfect market to invest in. For instance, it is not wise to buy a turnkey rental property in a city that has a very low growth rate in population and employment and where property prices have been stagnant for the last few years.

Best Turnkey Real Estate Market

This shows that the real estate is not booming in that city and an investing into rental properties entails a serious amount of risk. In the same vein also consider if the city has a diverse economy, has sports and cultural awareness, cheap real estate and a steadily increasing population. These should all be put into consideration. If the market is good like Atlanta, you should plan to get about four to five properties in each city. Read this article for the 10 hottest real estate markets for buying investment properties in 2018.

FINANCE TURNKEY RENTAL PROPERTY PURCHASE

FINANCING TURNKEY RENTAL PROPERTY

Now, the next step is to get financing. Before you begin your turnkey rental property investment, it is ideal to have a secure means of funding your real estate investment. If you don’t, there is no reason why you should research for the turnkey rental properties in the first place. If you have all the money needed to buy the properties, then you can skip this. For most people this is the most difficult step. You need to find a lender who is licensed in the state you have picked for investment. It is also good to see a lender who is licensed in many states; this is to your benefit if you are seriously considering retiring early with out of state turnkey rental properties in your investment portfolio. For this, you definitely need multiple turnkey properties in your name. Also ensure, you don’t purchase them all in one city, be diverse and using a multi-licensed lender will make life easier as you will continue to work with them in the future. For more information on things like mortgage options, you must read how to finance turnkey rental properties.

FIND TURNKEY RENTAL PROPERTY FOR SALE

Now you that have a perfect market in mind, you also have a right lender; the next step is to find the best turnkey rental properties for sale in that state and remember to sieve off the craps. You won’t love to work with any turnkey rental property provider that is not reputable, some are bad, some are good or just okay, but some are really great. Find the ones who are looking out the best for you. Your interest should be your priority here. Find the ones with a lot of positive reviews from recent customers on websites like Yelp, Zillow, Realtor, etc. Look for the best turnkey rental property companies who want to build a long-term relationship with their customers, and not the ones who are just interested in selling whatever is available with them.

If you opt to use the search engine for this then Google, “best turnkey sellers”, “turnkey properties for sale’ or “turnkey providers’‘. Append your city name to see what will pop up. This will show you the top ranking turnkey rental property companies like Norada Real Estate Investments. Norada Real Estate Investments helps you by researching top real estate growth markets in the USA and structuring complete turnkey real estate investments, they help you succeed by minimizing risk and maximizing profitability. You can also go to websites like turnkey-reviews.com. This site lists many turnkey providers and their reviews. Once you have made a choice; ensure you ask the top questions to that turnkey rental property provider. It is essential to know their track record, call their previous clients and pick investors that have up to 2 to 3 years of experience. In the same vein understand if they offer any rent guarantees and maintenance warranties. These are all critical factors for your investment.

REVIEW TURNKEY RENTAL PROPERTIES FOR SALE

Start checking out all the available turnkey rental properties in their inventories. Make sure the property you want to purchase fits your criteria. You should take turnkey investment property provider’s numbers and calculations for ROI with a grain of salt, and hire your own turnkey property investment adviser. Do your research and confirm the rents, taxes, estimated repairs and vacancies as this is an integral part to avoid later regrets. You should adequately know if the location is excellent as your research will give you better insights into price appreciation forecast. Stay away from high crime zones as it will ensure your property doesn’t go to waste. If you can’t find a turnkey rental property for sale which fits this criteria yet, please it will be wise to be patient. Wait for sometime or better go to some other market. By any means don’t tie your emotions and love to a single property or market, this is business, and you must stay in a business mode to get the best turnkey rental property deals.

PUT THE TURNKEY RENTAL PROPERTY UNDER CONTRACT

When you have chosen a turnkey rental property that fits your criteria, you will be elated, and the next step is to fan forward put your rental property under contract. Don’t get your hopes high yet, the journey still continues. There are still steps to take, to make your turnkey a grand winner. At this point, sign required agreements and addendums you might have with the seller and send off a earnest money check (a warm one). Not all providers or sellers want an earnest money, so ensure you inquire before jumping to conclusion. It is wise enough to get a refund on your earnest money if the inspection or appraisal does not meet the requirements. Therefore, your addendum must have this clause in it.

ORDER INSPECTION OF YOUR TURNKEY RENTAL PROPERTY

Home Inspection

This is important regardless of what the turnkey rental property provider has told you; you have to do this as soon as the paperwork and agreement have been started. If the property is still in rehab, then you have to wait until it is complete. Many times, the providers put on lip service just to sell their properties, so a complete home inspection will reveal the real facts. You must hire a licensed general contractor in the state who has an in-depth knowledge and specializes in residential home inspections. They will give you a detailed multi-point report describing the condition of the exterior and interior of the property. They will include some specific details (with photos) in the property inspection report. Usually, they will deliver a report to you within 24 hours on rush orders.

TIME FOR NEGOTIATION OF THE PURCHASE PRICE BASED ON THE HOME INSPECTION REPORT

Once the inspection of your turnkey rental property is done, you will have a substantial evidence of what is and what is not, at this point don’t break due to the reports. Instead, send out the report to your providers and ask them to fix the issues at hand. In a perfect setting, they should fix this but in some situations the may not. Even then, try to get them to fix the major issues and if they still refuse then it’s time to back off. It’s not the end of the world. It can happen to anyone but hopefully not you. Find a new turnkey rental property deal for yourself and follow the same steps again.

ORDER PROPERTY APPRAISAL AND VISIT THE PROPERTY

Turnkey Rental Property Appraisal

Wait and order this after an inspection and repair is done. If the appraisal is not up to the purchase price, then this is also a good time to call it a quit. If all works out well, get acquainted with the city you want to invest in. Visit your turnkey rental property and meet your providers and see what you have in the contract. This can also be done earlier or later. After all these, other few remaining steps follow suit. These are securing your tenants, closing on your new turnkey rental property, Relax and then wait for your gains.

FIND TENANTS FOR YOUR TURNKEY RENTAL PROPERTY

A true turnkey rental property provider will find tenants for you before closing the deal. They might also provide you with a Property Management Company. If you choose to use a different turnkey property management company, make sure you interview them properly. You don’t have to use the property management that the turnkey seller provides.

Some of the things you must check before signing an agreement with them:

  • Make sure that the turnkey rental property management company you choose has experience in the type of property you have whether it be single family, duplexes or condos.
  • Ask them how long they have been in this business.
  • Ask them for the phone numbers of their clientele, and call them for the feedback. Do not hesitate in this regard. Their clients will give you a genuine firsthand experience in dealing with them.
  • You will also have to check what their management fees is. Usually it is 10% of the monthly rent.
  • How do they screen for qualified tenants? Do they do the background and credit history check of the tenants?
  • How do they calculate the rent value? You can use Zillow to match their rent prices and also see the rent prices of other houses in the neighborhood.
  • How do they accept the payments from the tenants? Do they have an online payment system?
  • It is better if you ask for it and review their sample contract documents before hand to confirm they work well for you. You cannot manage your out of state turkey rental properties. Therefore, having an efficient and reputable management in place is essential to your investment. It’s in your best interest to interview them and ask all the important questions mentioned above.
CLOSE THE DEAL OF YOUR TURNKEY RENTAL PROPERTY

As you move closer to closing the deal, your lender will ask for final paperwork needed at the request by their underwriters. Make sure to provide all requested information promptly to your lender. A lack of proper documents may lead to cancellation of your loan. You need to keep your lender happy for future turnkey property investments as well. You have the clear to close and now an appointment has been set for closing. Now you need a title company which acts as a combined agent of, the buyer, the seller, and any other parties related to a real estate transaction, such as mortgage lenders. The title company reviews title, issues insurance policies, facilitates closings, and files and records paperwork. A title company mutually chosen by all the parties will send out a notary to your location to sign all the closing documents. Make sure to review all the final documents very carefully before signing.

Now it’s time to earn money by collecting your monthly rental income. These are some of the recommended steps you need to take for buying turnkey rental properties.

© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

The post How To Buy Turnkey Rental Properties appeared first on Real Estate Investing Blog.

Turnkey Property Investing

Turnkey Property Investing

Want to become a landlord and enjoy a passive rental income from your investment property but don’t know how, or are unable to invest time in renovating and finding the tenants for your property, then buying a ‘Turnkey Property’ might be the best solution for you. There are a lot of different ways to invest in the real estate market. You can passively invest in REITs, do fixing and flipping or wholesaling, own rental properties, and indulge in all sorts of other investment opportunities in the passive real estate investing sector. Like any other real estate asset, a turnkey property can be easily acquired, and the process is similar to purchasing your own single family house or a condominium.

What is a Turnkey Property | Turnkey Property Definition

A turnkey property is a term often used for a real estate investment property, which has already been renovated before it’s put on the market, is ready to move in and can be immediately rented out. The definition of a turnkey investment property can be simply put as a potential income producing property because it has already been fully rehabbed, usually by a specialized turnkey real estate company, and can be put on a rent for a passive monthly income.

Investing in a Turnkey Real Estate іs а sіmрlе соnсерt іn whісh thе іnvеstоr buуs, rеhаbіlіtаtеs, аnd thеn rеsеlls а рrореrtу аt а рrоfіt. Тhіs іs аlsо knоwn аs “flірріng” а hоmе. However, you can also buy and hold a turnkey rental property and enjoy a passive rental income from it. Тhіs рrосеss can also hарреn rеmоtеlу, if thе іnvеstоr rеmаіns іn hіs оr hеr оwn hоmе, sоmеtіmеs іn а lосаlе whеrе flірріng dоеsn’t mаkе sеnsе, аnd utіlіzеs the services of a real estate investment company like “Norada Real Estate Investments” tо fіnd аnd іnvеst іn turnkey real estate investing орроrtunіtіеs. Тhе gоаl hеrе іs tо mаkе thе рrосеss оf іnvеstіng іn rеаl еstаtе аs еаsу аs роssіblе, sо аll thе іnvеstоr hаs tо dо іs flір а swіtсh оr “turn thе kеу.” Many real estate investment companies are there in the US that specialize into restoring the old properties and also provide services to investors minimizing the efforts of the buyers to convert the property into a rental one.

What are the Benefits of Investing in a Turnkey property

Real estate always shows the prices getting higher, but the stats have shown that in U.S., for a long-term period, buying a property has been cheaper than a renting one, that is where the opportunity has generated for the investors, who have been thinking about stepping into the real estate investment in the form of Turnkey Property. In recent years in the U.S., the Turnkey Property Investing has become a trend in the passive real estate investing sector.

How Investing in “Turnkey Property” Helps Real Estate Investors

Turnkey properties have become more popular in the investors who cannot find the affordable properties where they are based, like New York City. Such people prefer to buy the properties in more affordable markets in order to generate more cash flow month after month. As good as it sounds, you should know if the property is of a good value. Before sealing the deal, as real estate investment experts’ advice, you should always visit the turnkey property personally, even if you have to fly to another city. Property management companies would dazzle you about how spacious the living room is and the house or an apartment is fully renovated, but you should check the property for its modest features like the roof and furnace and make sure they are in the good shape.

How to Buy a Turnkey property

A turnkey property investment will provide you a passive rental income which would require you to look into houses or properties that could house a number of families as tenants. These houses could be rented out. However, this kind of investment may have drawbacks since the property may end up with bad tenant or without any tenant at all. If managing your turnkey rental properties is not your cup of tea, then you could try getting a turnkey real estate investment company. They would be managing the property for you in exchange of a percentage of your tenants’ monthly payments. Many turnkey real estate investment companies specialize in restoring old properties and may provide other services to investors like renting out the property and checking up for its maintenance, so you should be really careful while deciding to go with any property management firms.

How to find a turnkey property

You do not want a turnkey investment company, which is slow at handling any maintenance and repair problems that would occur and cannot find the tenants to replace the tenants, who leave, in which case the vacancy rate would drastically affect your annual ROI. Usually turnkey property management companies provide maintenance and repair services for the properties like lawn care, frozen pipes, elevator breakdown, broken garage doors and the investor need not worry about these daily operations. Before sealing the contract with any property management firm, you should know:

  • The experience of the property management firm
  • How long it takes to find the tenants
  • If they provide monthly statements and keep track of expenses and income
  • Fees of the property management firm on which your net ROI depends.
Why Invest in Out of State Turnkey Properties?

You should invest in out of state turnkey properties because of the simple fact that the best real estate opportunities are not always found in your neighborhood or local market. With over 400 markets around the United States, some markets become more favorable than others as they transition through their individual market cycles. That means that at any given time there will be markets that offer you better opportunity in terms of cash-flow and/or appreciation potential. You could find an out of state turnkey property investing opportunity with lower prices, higher and better returns and better cash flow.

Where to Find Out of State Turnkey Properties?

The first thing you need to do is identify what markets you want to get into. If you are novice real estate investor, you must consult a turnkey real estate investing adviser. They can guide you in choosing the best possible markets and connect you with the best turnkey property sellers there. Be watchful as a few people simply toss the word “turnkey” around. Some are simply rookie agents who would tell you that the property does not need any repair work and is move in ready, and then will dump you on to a property management firm when they profit off of the deal.

turnkey real estate agent

Therefore, you must do a research on the internet to find the best turnkey real estate investment companies like Norada Real Estate Investments. You can bookmark the top rated turnkey real estate websites and go through the information they have provided.

Turnkey property investment adviser

You should choose only those companies who have been in the turnkey property selling business for at least one decade or so and have ample amount of positive reviews in their kitty. Search for “turnkey investment company reviews” and read them very carefully. If you find any negative review about a company, you should try to contact the reviewer as well as the company and find out what went wrong in that deal. Be very upfront in this regard as you are putting your hard earned money in that investment. Any wrong move in turnkey real estate investing can result into negative cash flow and you may have to sell the property without making any profit at all.

10 Hottest Real Estate Markets For Investment Properties in 2018

Read on to learn about the 10 hottest U.S. real estate markets for 2018. Here you will find the best turnkey rental properties for sale in America’s 10 Hottest Real Estate Markets for 2018. You will get the real estate marketing trends for 2018. Information about the current US housing market statistics. Existing home sales historical data for major US cities. An in-depth real estate market analysis report for top cities in the US. A 5-year forecast of property evaluation, pricing, growth and employment rate for the 10 hottest and emerging real estate markets.

For these 10 hottest and emerging real estate markets, Norada Real Estate Investments is the pioneer company which sells fully rehabbed turnkey properties at 20% less than the market price.

Atlanta Investment Properties For Sale

Beautifully rehabbed single family homes and townhomes in various and nice communities in and around Atlanta, Georgia. All these Atlanta investment properties for sale have new roof, A/C, paint interior and exterior, flooring, appliances, fixtures, and major yard clean-up. The Atlanta turnkey properties are pre-analyzed with solid ROI. Atlanta is home to one of the most highly sought after turnkey real estate investment markets in the U.S. Buy Properties 20-50% Off Retail. The best source for Atlanta real estate investors to find great discounted off-market properties.

Memphis Investment Properties

The best place to go for real estate investing in Memphis, Tennessee. You will get completely renovated turn key Memphis investment properties. Norada Real Estate Investments provides real estate investors with opportunities to maximize their return on investment with the best Memphis investment properties. You will get fully renovated single and multi-family tunrkey properties in Memphis, TN.

Dallas Investment Properties

You will find the best neighborhoods to buy an investment property in Dallas. Norada Real Estate Investments provides rental Income Protection for Dallas Investment Properties. They provide highlights such as Market Overview, Market Analysis and Economic Analysis with a forecast of 5 years.

Chicago Investment Properties

The best source to search for the hottest investment properties in Chicago. Chicago is the United State’s third most populous city and home to about 3 million residents. There are a lot of benefits to owning Chicago Investment Properties. All turnkey properties are off-market, pre-analyzed and rental ready.

Houston Investment Properties

Norada Real Estate Investments gets you the best Houston Investment Properties at 20% discounts. Houston is one of the nation’s strongest housing markets. You will get fully rehabbed turnkey properties managed by professional property management companies.

Tampa Investment Properties

Fully rehabbed and rental ready Tampa investment properties. Norada Real Estate Investments provides you the best market of rental ready and tenant-occupied and single-family rental homes in Tampa, FL.

Investment Property For Sale San Antonio TX

Your exclusive access to the best investment properties for sale in San Antonio TX. The turnkey investment properties are fully renovated and located in the areas with a strong & steady real estate market.

Kansas City Investment Properties

Norada is the Kansas City`s leader in the turnkey real estate investing and a premier provider of fully rehabbed investment properties in Kansas City. They specialize in finding and offering deeply discounted turnkey properties for a passive real estate investing.

Charlotte Investment Properties

Charlotte properties have a high rate of return. Investment properties in Charlotte that you can use as rental properties offer an excellent source of cash flow for your passive real estate income.

Palm Bay Florida Rentals

Great deals on recently listed investment properties in Palm Bay. Pre-analyzed and fully renovated Palm Bay Florida Rentals with a solid annual ROI.

How To Finance Turnkey Investment Properties

Though it sounds like a great way to generate extra revenue, financing for the turnkey property can be an expensive affair and often it would be difficult to get enough cash flow from the turnkey property itself. In real estate trying to buy a turnkey property with less than 20 percent of the value as a down payment can be a difficult situation. Raising that kind of liquid cash can be difficult if your assets are either already tied up in your home (mortgage), or if you don’t have any assets at all.

So before buying a turnkey property and renting it out, the investor should be prepared for the surprises like a natural calamity, moving out of tenants, sudden hikes in property taxes and accidents like fire, falling of a tree. Investor should always have an extra cash to deal with these sudden changes.

How To Finance Turnkey Investment Properties

Investor can take a loan from the moneylenders or the banks to finance a Turnkey Property. If your credit rating is very good, you can take the full advantage of getting a loan amount equal to 100% of the value of the house from your bank. However, if you pay down less than 20% of the home’s purchase price, then your lender will require you to pay for private mortgage insurance (PMI). Your lender will often offer you a lower rate if you can make a higher down payment and vice-versa. Typically a down payment ranges from 5% to 20%.

What is Loan-to-Value Ratio

A loan to value (LTV) ratio is a number that describes the size of a loan compared to the purchase price of the property securing the loan. Lenders and others use the ratio to understand how risky a loan is, and it can be used for approving loans or requiring a private mortgage insurance (PMI). Your loan-to-value ratio (LTV) indicates how much you will owe on the property after your down payment. The higher your down payment means lower your loan value and a lower LTV as well. If your down payment is lower than 20%, your loan-to-value ratio for conventional financing will be higher than 80%, and your lender may require you to pay private mortgage insurance.

For example:

If $200,000 is the purchase price of the property and you have $40,000 for a down payment, then you need a $160,000 loan amount to meet the $200,000 purchase price. Your LTV = $160,000 ÷ $200,000 = .80 x100 = 80%.

An LTV ratio helps lenders evaluate risk because the more they lend, the more risk they’re taking. A higher LTV ratio suggests more risk because the assets behind the loan are less likely to pay off the loan as the LTV ratio increases. Higher risk for the lender means they will charge you more interest rate and you need to pay private mortgage insurance (PMI) as well.

Why do lender’s lend up to 80% (or less) of the property’s value? Well, it is because they can sell the property at less than top-dollar to recover their funds at an REO auction.

You must remember that you need to payback your loan in EMIs, and for a positive cash flow you should be able to deduct your EMIs as well as property management fees from your monthly rental income and save some amount as well. Otherwise it can be a negative cash flow. It is a simple Mathematics. Right?

According to the figures from the usbank.com in January 2017, for 10-year fixed rate mortgage the interest rate is 3.625%, for 20-year fixed rate conventional mortgage, average interest rate is 4.125% and for 30-year fixed rate mortgage, the interest rate is 4.25%. Your turnkey real estate investing advisor will help you in getting your property financed through banks or private money lenders.

To analyze a turnkey property and do your calculations, you can use DealCheck: Rentals, a powerful app developed for this tedious task. You can easily calculate cash flow, Cap rate and ROI using this app.

What are the different types of mortgage options available for home buyers Fixed-rate mortgages

A fixed-rate mortgage means your mortgage interest rate and your total EMI of principal and interest will stay the same for the entire term of the loan. Your EMI will not increase or decrease.

Adjustable-rate Mortgage

Adjustable-rate mortgages have an interest rate that may change periodically depending on changes in a corresponding financial index that’s associated with the loan. Therefore, your EMI will increase or decrease if the index rate goes up or down.

Alternative mortgage options

Some eligible homebuyers or investors may qualify for a FHA (Federal Housing Administration) or a VA (Department of Veterans Affairs) loan. These loans tend to allow a lower down payment and credit score when compared to conventional loans. These two options are most popular among the homebuyers in the US. FHA loans are government-insured loans and VA loans are offered by VA-approved lenders. For example, Bank of America is both FHA and VA approved lender.

What Are the Benefits of Buying a Turnkey Property
  • The first advantage is that the buyers do not need to spend time in finding a property, renovating the property and finding the tenants all by themselves.
  • You start getting Cash flow from day 1.
  • The turnkey properties are fully renovated and are ready to move in and the property management companies look into the maintenance and repair of the properties themselves.
  • These property management firms do the maintenance tasks like lawn care, elevator maintenance, and collection of rent from tenants.
  • They also attend to the complaints of the tenants like termites, broken garage door, broken air conditioner, etc, so the investors do not have to worry about these things at all.
  • The property management companies are responsible for finding the new tenants within time in order to replace the once those leave.

  • It is also an eаsу dіvеrsіfісаtіоn оf уоur іnvеstmеnt роrtfоlіо. A turn-kеу rеаl еstаtе іnvеstmеnt саn bе а wіsе mоvе, іf dоnе соrrесtlу. Оnе аsресt оf соrrесtlу ехесutіng а turnkеу rеаl еstаtе іnvеsting strаtеgу іs іnvеstіng рrореrlу іn multірlе growth mаrkеts of the US like Dallas, Houston, Atlanta, Memphis, Orlando, Jacksonville, San Antonio, Birmingham, Little Rock, etc., sоmеthіng thаt іs еаsу tо dо sіnсе іt rеquіrеs lіttlе tо nо tіmе оf уоur оwn.
  • Тhе bеnеfіts оf іnvеstіng іn multірlе mаrkеts are sіmрlе: іt рrоvіdеs уоu wіth рrоtесtіоn frоm аn unехресtеd dоwnturn іn аn есоnоmу.
  • Ѕіnсе a turnkеу rеаl еstаtе іnvеstіng mаkеs іt sо еаsу tо hаvе multірlе income рrореrtіеs, thіs іs а very sіgnіfісаnt аdvаntаgе оf this іnvеstmеnt strаtеgу. Іn оthеr wоrds, dоn’t рut аll оf уоur еggs іn оnе bаskеt. A turnkey property investment can become your solid second income source with ROI ranging from 7 to 12% depending upon the where the property is located.

On the other hand, if the investor itself buys an old property, they need to look into everything from finding a team for renovating the house or an apartment, fixing the damaged roof and broken doors, finding the tenants, meeting and bargaining with them and sealing the contract. Not to mention the investor will have to check for the maintenance for the rent out property and also will be responsible to attend to the complaints of the tenants.

Turnkey Property Management | How to Find a Reliable Property Management Company

You must have realized that to buy a turnkey property you need to contact a turnkey property management company, and that is why it is inevitable to find a proper seller to invest in a turnkey property. While we discussed some of the points regarding what you should know about the turnkey property sellers under the section “How to buy a turnkey property” of this article, here we will focus more on the more important aspects like a rental agreement, workmanship, ownership etc.

Turnkey Property Management

Most turnkey investment companies sell the house to an investor, and the investor will be the sole owner of the turnkey property, but sometimes turnkey property management firms create a limited liability company and ask the investors to become a general partner of it. This is because they want to stay in title to make things easier. Whenever there is a repair to do or the regular maintenance operations to take care of, they would not need the investor’s permission every time to do so for every small thing. But on the contrary it may cause a big headache for the investor, so one way is to open a separate account for the repair and maintenance of the property that the turnkey property management firm can access while the investor will be the sole owner of the property. Second important thing while selecting a turnkey property seller is to check if they provide:

  • Full transparency in the financial reports of their properties and immediate access to your information request.
  • A real estate CFO specialized in strategy planning in their staff that will ensure the profit in your every transaction and your long-term success.

Before going further, talking to the existing clients of that turnkey property selling company who have made a deal with them in the same neighborhood, and knowing their strengths and weaknesses is also important in order to make “buying a Turnkey Property” a successful investment for yourself. Тhеrе аrе immense bеnеfіts tо a turnkеу rеаl еstаtе investing, аnd іt саn dеfіnіtеlу bе аn аttrасtіvе саsh flоw strаtеgy for novice buyers.

© 2017 by Marco Santarelli and Norada Real Estate Investments. Your Premier Source for Turnkey Cash-Flow Investment Property.

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