Author: Antoine Martel

It’s just as important to shop for a great turnkey property company as it is to shop for a great turnkey rental property. Not all turnkey property companies are the same, so you should learn how to properly vet any companies on your short list to work with. You’ll need to conduct due diligence and use discretion when looking for the turnkey property company where you’ll buy rental properties. Ideally, you want to choose a company that has a good reputation and who will be there in the future as you expand your real estate investment portfolio. Think of choosing a turnkey property company as entering into a long-term relationship that will serve your real estate needs over and over again. 

What is a Turnkey Property Company?

A turnkey property company offers turnkey investment properties that provide you, the owner, with a house that’s been renovated and is ready to be rented out. The idea is that the tenant covers the expenses of ownership such as mortgage, property taxes, insurance, HOA fees and property management fees. The home is ready to be occupied. 

The Perils of a Doing it Yourself

If you’re buying a property off the MLS with ambition to make it an occupied, cashflowing rental investment property, be prepared for a lot of work. You now have a second job. You have to:

 – identify a property in a good area

 – accurately (and quickly) determine what level of renovations to complete

 – submit offers (often thru a realtor) to buy the property

 – wait for your offer to be accepted or rejected

 – interview , select and manage the construction team (and pray they show up to work)

 – determine if your rent numbers are accurate once the construction is complete 

 – get professional photos once complete

 – advertise the property for rent

 – collect applications from prospective tenants

 – conduct applicant background checks

 – verify applicant employment

 – find and hire a property management company (unless you plan to do it yourself)

 – get occupancy certificates from the city

 – and much, much more….

Whew! We’re tired just writing the list. Imagine having to do all that, plus do your full-time job and take care of your family! That’s why a lot of people say they don’t want to be a landlord, and we don’t blame them. We don’t want that life, either, for ourselves, or for you. That’s why MartelTurnkey does things differently.

MartelTurnkey Offers Passive Income, Not Just a Turnkey Property

At MartelTurnkey, we say that our success has a lot to do with the processes we have in place and the teams we have on the ground. We have been refining the process for 8 years!  Each house is managed by a professional PM team who are responsible for securing a tenant. They take the photos, they advertise and they vet the applicants to make the best selection. When you take ownership, the tenants on the lease become your tenants, and the property management company works for you. You can go on with your life while collecting passive income. It goes straight into your bank account every month. No dealing with tenants, no late night calls for random issues, and no hassle. 

How to Vet a Turnkey Property Company

Vetting a turnkey property company involves a few steps, but don’t worry; they’re easy. We’ve outlined what to look for in a great turnkey property company:

1. Principals Have a Background in Real Estate

Why? Because anyone and their cousin can make a website and call themselves a turnkey property company. That doesn’t mean they know the first thing about real estate. 

The Martel family has been studying and working in real estate for over a decade. We live and breathe real estate all day long (and then some!). You can trust us to know what we’re talking about!

2. Great Reputation

If there’s anything good that came out of the internet, it’s that word gets around. It’s harder for companies to get away with scams and bad service, since reviews are posted online and people talk in forums. Obviously, there are going to be trolls, bad actors and naysayers, many of whom have never even worked in real estate, or who are just trying to knock out competitors. But you want the majority of the online chatter to be positive.

We’re proud of the outstanding reputation we’ve earned at MartelTurnkey. We have several hundreds of satisfied clients who are, at the very moment, happily collecting passive income from turnkey properties they bought from us. Much of our business comes from referrals and repeat buyers which we truly appreciate.

3. Transparency

Too many turnkey property companies hide things from potential clients. We’ve done our own due diligence, checking out what our competitors do, and we often hear about the challenges of reaching a live person. You should be able to call the company, speak with a real person (not a chatbot), and get answers to all your questions without having to give up all your own personal information. Data mining isn’t our business. Delivering the chance for passive income is.

At MartelTurnkey, it’s easy to schedule a call and you’ll be talking to a MartelTurnkey employee or Martel family member. All you have to do is reach out. 

4. Passive Income, Not Just Turnkey

Look for a company that goes the extra mile and sells turnkey property that offer passive income, not just the property itself. Okay, this is cheating a little bit, because, frankly, MartelTurnkey is one of only a few that offers turnkey properties with leased tenants in place and a 3rd party property management company attached. 

5. Quality Renovations

There are Instagram level renovations and then there are quality renovations. Too many so-called turnkey property companies slap some paint on the wall and call it a day. Our construction teams understand our model and work to meet our standards and that of the community. 

The turnkey property company you choose will hopefully be your investment partner for many years to come. Take your time to select the one that will best serve your investment needs. At MartelTurnkey, we take great pride in the fact that we hit all the marks for the best turnkey rental companies. If you’d like more information about our company, our properties or anything else about turnkey rental investments, please feel free to contact us. We look forward to hearing from you soon and we will take great care to help you reach your goals.

Navigating the complexities of financing an investment property can be daunting. However, with the right strategies, you can secure the best possible interest rate, enhancing your investment’s profitability. MartelTurnkey has access to a pool of lenders who we will introduce you to, to ensure a smooth and speedy transaction when you buy a turnkey property through us. In the meantime, here are some invaluable tips to guide you through the process of financing your investment property:

Consider a Conventional Loan For Investment Property

Opting for a conventional loan is a solid starting point for securing financing with a lower interest rate. Conventional loans aren’t backed by the federal government, offering more flexibility and potential for multiple property financing. You may be able to buy up to ten investment properties with conventional lending. To qualify, you’ll need steady employment, verifiable through a W-2 or two years of tax returns if self-employed, and a good credit score. This type of loan is highly recommended for real estate investments, hailed by Warren Buffet as the “best ever” vehicle for real estate investment. 

Choose the Right Conventional Lender

The lender you choose can significantly impact the interest rate of your conventional loan. Not only is it important to choose a lender with experience in the state in which you’re buying; since these loans are sourced from the private sector, rates can vary widely. Make it a priority to work with a lender who not only offers competitive rates but also understands the needs of out-of-state investors and prioritizes customer service. Also, a lender focused on volume over large commissions will likely offer lower interest rates, which can greatly increase your cash flow.

Leverage Interest Rate Buydowns (aka Points)

An interest rate buydown (also known as points) can substantially decrease your loan’s interest rate for its entire duration, not just the initial years. By paying points upfront, you can secure a permanent reduction in your interest rate, enhancing your property’s cash flow from the start. This strategy does require a small but higher upfront cost, but offers benefits over the life of the loan, making it a powerful tool for investors aiming for maximum cash flow.

Increase Your Down Payment

The amount of your down payment plays a large role in determining your interest rate. While larger down payments require more upfront capital, they lead to lower interest rates and increased cash flow. Many investors find a 25% down payment to be the sweet spot, balancing upfront investment with lower ongoing costs. Adjusting your down payment based on your financial goals and market conditions can optimize your investment’s performance. Ask your lender to give you a few options with different down payments.

Negotiate Purchase Price to Your Advantage

This one is not related to a MartelTurnkey house which is generally under $200,000, but in the entire real estate realm, the purchase price of your property can affect your interest rate. Contrary to what you might expect, higher-priced properties can sometimes come with higher interest rates. This is because larger loans are more likely to be refinanced if interest rates drop slightly, which lenders may try to counteract with higher initial rates. Therefore, investing in properties with lower purchase prices might not only require less capital but could also offer better financing terms, enhancing cash flow. 

Exploring Asset-Based Lending (DSCR Loans)

Another strategic financing option for investment property is through asset-based lenders. This approach diverges from traditional lending criteria, focusing primarily on the value of the assets you’re financing rather than your income or credit score. Commonly known as DSCR loans, asset-based loans can be particularly advantageous for investors who may not meet the stringent requirements of conventional loans or who seek flexibility in their financing options. These lenders assess the investment property’s potential income and the investor’s overall asset portfolio to determine loan eligibility and terms. This method can offer quicker access to funds, with less emphasis on personal financial history, making it an excellent option for those with strong investment opportunities but less conventional financial profiles. Asset-based lending can complement your financing strategy, providing a viable pathway to securing investment properties with terms tailored to the asset’s value and potential return. It’s a powerful tool for investors looking to expand their portfolios with agility and precision, especially in competitive real estate markets where speed and flexibility can be key to securing prime investment opportunities.

Securing financing for an investment property is a critical step in building a successful real estate portfolio. No matter which lender you choose, it’s important to work with a lender who is an expert in investment properties in the state where you are buying. 

By carefully selecting your loan type, lender, and financing strategies, you can significantly reduce your interest rate, boosting your investment’s profitability. You won’t be left to figure out financing on your own when you choose a MartelTurnkey investment property. We’ll connect you with a list of lenders who  understand our business and with whom we’ve built a relationship in order to make your financing go as smoothly as possible. Contact us today to get started.

If you invest in rental property, one of the biggest advantages you have is depreciation. You may have heard of some of the “tax advantages” of real estate investing. Now, the US tax code is over 60,000 pages long. Even CPAs don’t know every word of it.  But one part of the tax code every real estate investor should understand is that the IRS allows you to claim “depreciation” of business assets as a tax write-off. That includes rental real estate.

What Is Depreciation? 

What does depreciation mean? It essentially means you can write off “wear-and-tear” of the property as an expense. The idea is that the asset becomes less valuable every year due to this wear-and-tear, and you can deduct that loss of value.

Of course, one thing we know and love about real estate is that it often gets more valuable over time, not less. Yes, wear-and-tear might mean extra repair costs, but with the right property, your rental income will more than cover that.

In other words, the IRS is allowing you to write off an expense that doesn’t really exist. It doesn’t take money out of your pocket … but you still get to deduct it from your taxable income, lowering your tax burden every year without you having to spend extra money to get that deduction!

Homeowners don’t get to do this … only landlords. By law, you can’t take depreciation on your personal residence, just rental property.

How Much Do You Get to Write Off for Depreciation?

The IRS sets different “depreciation schedules” for different classes of assets. For real estate the current depreciation schedule is 27.5 years. Some real estate investors, especially buyers of large buildings, use a method called cost segregation to take accelerated depreciation, but for most small-portfolio landlords, 27.5 years will be the schedule. 

What does this mean? It means that for 28 years, you can depreciate 3.636% (100% ÷ 27.5 years) of the property’s depreciable cost basis.

The initial cost basis is how the total cost you paid to buy the property — purchase price, closing costs, initial repairs and/or rehab or renovation. It is the “book value” of the property. 

To discover your depreciable cost basis, subtract the value of the land. Land cannot be depreciated because it isn’t considered subject to wear-and-tear. 

Every year, if you deduct depreciation, you must subtract that depreciation from the cost basis to produce an adjusted cost basis. 

Let’s say you bought a rental property for $600,000 all in (purchase price, closing costs, rehab, etc.) and according to the tax assessment, roughly 16.6% of that property’s value is in the land. That means the initial cost basis is $600,000, the depreciable cost basis is $500,000.

In the first year, you can write $18,180 (3.636% of $500k) in depreciation off your taxes. Nice! You should owe a lot less, or get a much bigger refund, in April. Your adjusted cost basis is now $581,820. You can do this for the next 27 years, until the adjusted cost basis is $0.   

Depreciation Recapture

There’s a downside to depreciation. If you sell the property for more than you paid for it instead of less (every real estate investor’s goal) you are subject to a rule called depreciation recapture. 

Basically, the profit above the initial cost basis is taxed as a capital gain. However, the profit over the adjusted cost basis (adjusted down for depreciation, that is) is taxed as ordinary income, usually a higher rate. 

Fortunately, depreciation recapture is usually capped at 25%. If your profit is high enough, you won’t be too upset that you settled for the short-term benefit of lowering your annual tax liability. 

Nevertheless, consult with your CPA. You are allowed to write off less depreciation than the maximum allowed by the schedule. You are even allowed to write off no depreciation at all. In certain circumstances, that might be the better strategy. 

If you want to put the power of depreciation to work in your tax and investing strategy, reach out to MartelTurnkey! We help both beginner and seasoned investors — in state and out-of-state — to build wealth, create cash flow, and reduce their tax burdens with turnkey rental property in Cleveland, Memphis, St. Louis, and Detroit.

If you have visited MartelTurnkey.com in the past 6 months, or spoken to a sales team member, you know that the financials we provide on each house have consistently shown a 10% cash-on-cash return. Visit today and you will see the numbers are much different, showing a 20% – 23% return.  This change in methodology is long overdue, and a more accurate representation of the investment’s anticipated return. We know you’ll want to understand what’s changed.

Historically we have analyzed properties to ensure a specific cash-on-cash return for our customers. Most recently, it has averaged 10%.  The calculation is quite simple: Take the rental income and subtract the fixed costs (comprised of principal and interest, insurance, property taxes and finally property management fees).  On average the net cash flow is between $200 and $300 per month.  When you multiply this number by 12 months, you get $2400 to $3600 in annualized cash flow.  This amount equates to 10% of the down payment you have put on your house which would have been between $24,000 and $36,000.  Therefore we have told you you can expect a 10% cash-on-cash return when you buy a  cash flowing rental property at MartelTurkey. 

The Missing Factor: Appreciation

A 10% return on an investment is very good, especially when it is consistent year after year.  But in reality, the numbers are far better than this on your turnkey rental property, due to appreciation.  We noticed that our competitors are including appreciation for their calculation of returns. To help you compare more easily we decided to include appreciation as well.  It is an important part of the experienced investor’s formula for success. In our markets many of our investors expect to do a cash-out-refi within 5 years and then reinvest their original funds (the $24,000 to $36,000 we previously mentioned) into another house.  In order to do this, their house has to increase in value by this same amount. That growth is the appreciation. So, while our calculations and spreadsheets are very simple to understand, they don’t account for a major consideration which is appreciation. 

How Did We Adjust For Appreciation?

Realizing we need to add appreciation into our calculations, we had to determine what percentage (%) would be most accurate and conservative to use.  While we have been seeing anywhere from 10% to 19% appreciation in our markets in the past few years, this is a short moment in time and not the best for predicting future long term growth. Instead we decided to look at appreciation in our markets since 1995. The resulting percentage is different in each market. You may be wondering why we went back so far in time?  Well, as you know, the real estate market crashed in 2008 due to the financial crisis so by going back 27 years,  we are smoothing out these bumps that will give us the general trend on real estate appreciation . We are being super conservative but we prefer it this way. Additionally, these appreciation rates are based on a large geographical area, such as a county or metropolitan area.  We have our dedicated teams on the ground in the cities where we do business and they keep us apprised of what is going on.  We pick and choose where we invest, on a neighborhood basis, to maximize your returns and investment success.

So now when you look at the financials for a MartelTurnkey rental property, you will see a cash-on-cash return of 20% to 23% with the assumptions clearly written out, including the appreciation.  More knowledge is always a good thing.  We feel this change is long overdue and gives you a better indication of what you can expect from your investment property in the long term.  Please reach out to any of the MartelTurnkey team for more information or to put a MartelTurnkey property under contract today.  

For anyone newly getting into real estate investing, there may be some question as to where are the best places to buy rental property. Your research will uncover a bevy of opinions online, but the only opinions you should listen to are those with actual experience in terms of where are the best places to buy rental property. Once you begin listening to the experts, you’ll quickly see that certain answers keep coming up again and again. At that point, you learn the benefits of buying out of state turnkey rental properties.

Where Are the Best Places to Buy Rental Properties?

We have spent years now combing through the rental property markets in various cities throughout the U.S. Of course, the real estate market fluctuates, which is why we are constantly analyzing various markets. A handful of real estate markets have hit all the criteria that we use to determine if an area has economic viability in terms of where are the best places to buy rental properties. These are:

 – Cleveland, OH

 – Memphis, TN

 – St. Louis, MO

 – Detroit, MI

There will be others in the future, but for right now, this is where MartelTurnkey’s markets are, and where we offer quality, cash-flowing turnkey rentals for sale.

Ability to Diversify Your Portfolio

A big reason why you should buy out of state rental property is because it allows any investor to diversify their portfolio. Every financial expert agrees that diversification is essential for a healthy portfolio. It’s smart to have real estate as one of the assets in a portfolio, but it’s not always possible for investors since real estate can be cost prohibitive. But when you invest in out of state rental property, all of a sudden it’s possible—not only to afford the real estate—but to have a source of passive income straight out of the gate. Out of state rental properties enable even the most modest of investors to diversify and shore up their assets. If you’re interested in diversification through out of state rental property, you don’t need to worry about where are the best places to buy rental property, because MartelTurnkey has already got that part all figured out for you.

Lower Operating Expenses

Buying out of state rental property almost always guarantees lower operating expenses than if you bought where you live. Everything that is needed to operate your turnkey rental property, from the property management company to the property insurance, to the hardware and materials you may need over the years to purchase to maintain the property will be at the local cost, not in the more expensive market where you likely have your private residence. And remember that lower operating expenses mean you get a better ROI than you would if you tried to buy rental property in a pricier market.

When you’re ready to stop asking where are the best places to buy rental property and start looking for a turnkey property to buy, contact MartelTurnkey. We have a pipeline of turnkey rental properties for sale in Cleveland, Memphis, St. Louis and Detroit. Why not browse through our offerings and see what catches your eye? You could be sitting on a new source of passive income in as little as 30 days. 

As you know, MartelTurnkey has been investing in Cleveland for quite some time now. We’ve seen our investors’ properties increase in value and, in our estimation, there is a ton of value in the Cleveland rental market. We are happy to announce that in mid-June of this year, we’re offering a custom, personalized tour for up to 20 interested investors. Transportation and meals are included and, if you purchase a property—any property—from us through the end of 2022, your registration fee will be fully refunded! What could be better?

Who is the Tour For?

This tour might be a good fit for you if:

 – You are financially ready to invest but still have questions

 – You’re still a little hesitant about investing out of state

 – You like to know more about the places where you invest

 – This will be your first turnkey purchase

 – You value face time with your investment partners

 – This isn’t your first turnkey rodeo, but you want more first hand info about the Cleveland market

And frankly, this tour might be for you if you are just looking for an informative and fun weekend away!

How We Came Up With the Idea

The idea of offering a tour of one of our investment markets has been percolating for a long time. It stemmed from a bus tour we did in Memphis a couple of years ago. At that time, it was just us and some key personnel, but we had such a great time that someone mentioned the idea of offering a similar tour to investors. We brainstormed about what it might be like, and it sounded like a lot of fun. Fast forward to today and Antoine brought up the idea again at one of our weekly family meetings. We decided that now is the right time, especially after all the depressing lockdowns and isolation from COVID. It’s time to get together again and make good things happen in 2022!

Key Benefits of the Tour

Apart from the fun of getting to meet the Martel family up close and personal, there are a number of key benefits of the tour. The first one is of course….that you get to meet the Martel family up close and personal!  Unfortunately, Etienne Martel won’t be along for the ride because he is busy overseeing our turnkey property renovations in Memphis, as we wrote about. But you’ll get to meet and spend time with Eric and Lynn and Antoine. If you ever watch Antoine’s YouTube videos or Eric’s YouTube videos, you may have a small sense of what they are like, but in person it will be even better! Plus, you’ll get to meet and speak with Lynn, the Martel family matriarch who keeps it all together for “the boys” behind the scenes. She’s also part of the sales team and an expert on all the properties, so you can learn a lot from Lynn! You can also learn more about how you’ll be spending time with the family and other MartelTurnkey employees when you read through the itinerary below and on the official tour page. But rest assured, this isn’t like a Tony Robbins event where you spend most of the time with his representatives. You’re getting the full, personal treatment, just like you were one of our family!

Okay, another key benefit of the tour is that you’ll get to see—in person—the quality of renovations that MartelTurnkey provides. We’ve always said that we don’t do slap and tape renovations that fall apart five minutes after you close on the deal. On this tour you’ll get to see for yourself just how solid our rehabs are. Heck, they’re so sturdy and attractive, you might be tempted to buy one for yourself to live in! Now, we aren’t bringing anyone through heavy construction zones, so you can safely leave your hard hat at home. But you will get to see properties where the finishing touches are nearly completed and where there is not yet a tenant in place. These walk-throughs will allow you to see for yourself the quality of renovations that we pride ourselves on.

Another key benefit of the tour is that you’ll be able to view certain exclusive turnkey properties that are not on our website and not being shown to members of the general public. You’ll be able to have first dibs on the properties you see, as well as an opportunity to purchase a property that weekend if you like. 

The Deets

Down to the nitty gritty of the actual details. The full details are on this page of our website, but below you’ll find some extra helpful info.

We have space on the bus for only 20 investors, so be sure to register to reserve your spot right away! Like…now! Seriously, stop reading and go register!

On the Martel side, the Martel family, plus the sales team and other team members whose names you may recognize will be on the tour. Essentially, you’ll have access to our sales people, our customer service people and our property analyzers. 

General Itinerary

The itinerary is pretty straightforward and please note that it may change slightly between now and mid-June.:

June 10th

We hope to have all of our investors fly in on Friday. 

7 PM – We’ll have a welcome event in the hotel; a meet and greet to get acquainted.

June 11th

9:00 AM  – Official welcome breakfast in the hotel with introductions

10:00 AM –  The bus arrives to pick us up at the hotel and the tour begins!

During the tour we’ll drive around and visit the many favorite MartelTurnkey turnkey neighborhoods, such as Maple Heights, Euclid and Metro Cleveland, as well as some hot spots and area attractions. This will include the beautiful and fun Riverwalk area, a vibrant social scene that greatly enhances the quality of life in Cleveland.

We’ll also walk through several houses that are completed or near completion so you can see the neighborhoods and renovation standards in person. 

We’ll give extemporaneous highlights about new developments or long time businesses/employers in the area. This will help investors see why we’re so excited to be investing in Cleveland and why it’s a great area for you to invest.

1:00 PM –  Stop for lunch 

5:00 PM – Tour Completes

7:00 PM – Dinner together in a popular Cleveland area

June 12th

9:00 AM – Breakfast in the hotel 

9:30 AM – Discussion, Q and A and going over the numbers and deal analysis and answering questions for everyone. Our sales people will be available so you can sign a sales contract right there if you are so inclined.

12:00 PM – Official end of the weekend tour and free time, or you can leave as you wish 

* Please note that the itinerary is subject to slight alterations.

A Word About Safety Precautions

Because of the situation we are in as far as COVID, we currently  require that all participants be fully vaccinated. We are doing this out of an abundance of caution and out of respect for all of our investors, the crews we may interact with on property sites, and of course the general public. Thank you for your understanding. We will follow state and city ordinances at the time of the tour.

We hope you will join us on this fun and informative tour in Cleveland, Ohio in mid-June. We promise you’ll enjoy yourself and get some real value out of the experience! We’re sure you have more questions, so please reach out and contact us. We’ll be happy to answer anything and give you as much information as you need to make an informed decision!