3 Most Common Questions Asked By New Investors
The real estate industry is incredibly lucrative and offers a variety of opportunities for all levels of investors. Whether you’re a new investor, or a seasoned one, you’ll be able to find alluring opportunities that aren’t available in other industries. Because there are so many different investment paths and an abundance of resources readily available, getting started in the real estate industry can feel overwhelming for new investors. That’s why MartelTurnkey chooses to focus on selling turnkey rental properties. Not only are turnkey rentals some of the easiest investments to get started with, they also require very little maintenance and management on the investor’s end. For the new investor, turnkey rentals are the best way to get your feet wet in real estate. In order to help you out on your investment journey, MartelTurnkey breaks down the three most commonly asked questions of new investors, whom we speak with every day.
Can I Do What MartelTurnkey Is Doing, by Myself?
By far, this is the most common question we get asked. While we don’t like to dissuade anyone from pursuing their dreams, most new investors don’t have the two main things required to do what we do: time and connections. Getting MartelTurnkey to the level we are at now, where we sell approximately ten turnkey properties a month, took a lot of time including hundreds of phone calls, numerous out-of-state visits, hours of migration and demographic analysis, all complicated with lots of trial (and some error). Over time we pulled together the trustworthy teams we now have in place. Strong relationships with our construction crews, project managers, property managers, escrow and insurance companies, and on-the-ground advisors, result in our ability to offer a cash-flowing, rehabbed turnkey property in a short time frame. It’s very difficult to manage all of these moving pieces at once, and the time required makes it much less feasible. If you are determined to undertake an out-of-state rehab project, and you are in no rush to be cash-flowing, and you feel you can manage a project of many, many pieces, remotely, our advice is to achieve financial freedom first. And the best road to financial freedom is by building a cash-flowing, turnkey rental portfolio.
Should I Finance or Pay Cash on My Investment?
The idea of owning a property for only $20,000 is very attractive to our buyers and most of them choose to finance the balance. Sometimes, however, an investor will question if they should buy a property outright or get a mortgage. Before we give you an answer, a little more information is required. If you are purely looking to maximize your cash-on-cash returns, then the best choice is to finance an investment property. On the 20% down, you will be making approximately 15% annually after fixed costs. So, if you are planning to retire 15 years from now, then we recommend that you use financing. On the other hand, if you are close to retirement and want to maximize your net cash flow, then it might be better to buy the property with cash. While the return will be less, percentage-wise, it will be heftier as far as monthly incoming cash. At MartelTurnkey, we often recommend financing to our investors, but we also like to understand your goals and situation so we can help you achieve them. On each property in our inventory, the related financials show you the numbers for both cash and financing scenarios. Be sure to take a look.
Why Does MartelTurnkey Invest in Markets Like Cleveland and Memphis?
With a statistician on our team at MartelTurnkey, we are continually analyzing migration statistics, demographics, housing prices and current events across the country in search of the best markets for our buyers. Cleveland and Memphis are two of the best markets we have found to invest in today.
Memphis has a beautiful mix of historic and modern architecture. As a river city, it’s known as a booming transportation and industrial hub, and is home to the second largest cargo airport in the country as well as the FedEx Corporation Headquarters. Additionally, the city boasts more than ten colleges and several medical centers, both of which provide major employment opportunities for residents. Beale Street, Graceland, and the National Civil Rights museum bring thousands of tourists each year to the city. Housing wise, the median sales price is incredibly affordable, at $81,000. The average rent on our properties is also very affordable, around $750/month.
Cleveland and its numerous bedroom communities check all of our criteria boxes as well. Home to a whopping TEN Fortune 500 Company headquarters, the city also brings world class medical teams to the area at the Cleveland Clinic, which is rated the second best hospital in the USA and employs thousands of people at its many campuses. Amazon’s presence is also continually growing, and continues to regularly open warehouses throughout the city. Home prices in Cleveland are slightly higher than Memphis, but we select properties bringing a minimum 15% ROI to our investors.
Have more questions about real estate investing? Bring them to us. MartelTurnkey provides downloadable financials on any property and will review the cash vs. lending analysis with any potential investor. If you want to learn more or get started, simply book a call with an advisor at Info@martelturnkey.com.