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Vetting a Turnkey Property Company

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.

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Tips For Financing Your Investment Property

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.



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How to Screen Tenants

At MartelTurnkey, our turnkey rental properties are sold with a lease and tenant in place, vetted by a local, professional property management company. But eventually that tenant may move on, and you’ll need to fill the vacancy. With a property management company running your turnkey rental, you don’t have to lift a finger. Even so, if you’re becoming a landlord, you’ll want to understand what goes into the process and why the screening process is so important. Following is some information about both the need for tenant screening and how to conduct the process. This will give you insight into the extreme value of a quality property manager like those that MartelTurnkey works with.

 

Why Do Tenant Screening?

 

The tenant directly impacts your landlord experience whether or not you plan to hire a property manager for your rental property. Tenants do more than just pay rent. You can regard tenants as stewards in many ways. In fact, property managers want great tenants for you, as well. Think about it. When there’s a vacancy, the property manager doesn’t get paid. They typically make a modest percentage of rates, or a per door flat fee. But if there’s no rent, no money for the property manager. So your interest is the same as the property manager’s interest. They want to get you a good tenant who pays on time and lets them know when something needs attention. 

 

Good tenants take care of your property in your absence and alert you or your property manager to any problems. They change HVAC filters as requested, turn off the outside water main in winter to avoid spigots from freezing and maintain a temperate climate to avoid freezing pipes indoors. They park in designated areas only and preserve civil relations with neighbors.

 

A bad tenant can cause a great many problems for the property owner, including:

 

 – financial strain caused by late and/or missing rent payments

 – neighborhood disputes arising from misbehavior/activity/boundary violations/noise

 – property damage

 – damage to landscaping

 – abuse of furnishings/appliances

 – escalation of problems due to failure to report in a timely manner 

 

When you consider all the ways a quality tenant serves you and all the ways a bad tenant can sour your landlord experience, you gain insight into why tenant screenings are crucial and what you should be looking for in a good tenant.

 

The Goal of a Tenant Screening

 

You want a tenant that is going to consistently pay rent on time, take care of the property, keep in touch with you or your property manager about any problems and not cause disturbances in the neighborhood. To that end, you’re looking for a tenant who can keep a job, understands the workings of a house, is respectful of your investment and who fits well into the culture of the neighborhood. 

 

Tenant Screening Background Checks

 

A traditional tenant screening typically includes a criminal background check and a credit check. 

 

Criminal background checks may cover local, state and federal offenses.

 

Depending on state laws, the criminal background check may reveal if the person has an arrest record, outstanding warrants, citations or even dismissed cases where there was no conviction. This check will also inform you if the applicant is on any kind of official list, such as the registered sex offender list. 

 

A criminal background check tells you if the applicant is or was a criminal. You can then use this as a piece of the puzzle to form your overall picture of the applicant. 

 

The credit check will reveal how well the applicant manages their finances. You can purchase a credit check that gives you just a credit score, or you can get a deeper credit check that gives details about payment histories, charge-offs, bankruptcies, etc. 

 

The criminal background check and credit check are the two most commonly used tenant screening tools used. However, there are less formal tenant screening strategies to consider.

 

Additional Tenant Screening Strategies

 

Keeping in mind the role of the tenant in caring for your property investment and respecting the neighborhood culture, here are some additional screening strategies to consider using in order to ensure a successful tenant fit.

 

Call the Former Landlord(s) – Take a few minutes to call the previous landlord(s) about the applicant’s history there. You can only legally ask certain questions, but those questions are sufficient. You may be able to ask:

 

 – Did the tenant pay the rent on time each month?

 – Did the tenant get their deposit back?

 – What was the rent?

 – Would you rent to them again?

 – Was the tenant responsive to communications?

 – Was there any trouble with the tenancy?

 

View the Applicant’s Car – You can get a pretty good idea of how well your applicant would take care of your property by how well they take care of their car. The car doesn’t have to be a late model, but ideally it’s in good repair and clean. 

 

Consider How They Present Themselves – Did the applicant dress for the interview in an appropriate manner? They don’t need to dress like it’s a job interview, but apparel shouldn’t be at the other extreme, either. This conveys their respect for you and the process.

 

These are all things that your property manager takes care of with MartelTurnkey properties. Our property manager teams vet all tenants for a minimum income that’s three times the rent, are currently employed, and have had no prior convictions or evictions.

 

How Not to Screen

 

It’s unfair and illegal to screen tenants on the basis of sex, race, religious beliefs, physical or mental handicaps, nationality or familial status. Everyone deserves to seek and find appropriate and affordable housing. Never let personal or perceived prejudices cloud your judgment when screening tenants. Doing so not only makes you vulnerable to legal ramifications; it also may prevent you from getting a quality tenant who could have taken excellent care of your turnkey rental property for many years.

 

Think Outside the Box

 

Finally, don’t automatically exclude tenants that don’t fit in the standard box of what you think is the ideal tenant. For example, many people these days don’t have W-2 income. Be willing to accept proof of income from alternative sources like private wealth, Paypal or other “gig” income sources. 

 

Many landlords do quite well with Section 8 tenants. refusing to consider this segment of the population may mean missing out on regular, guaranteed subsidized rental income. 

 

The credit score is helpful but it doesn’t tell the whole story.  Ironically, those with lower scores are more likely to renew leases from year to year. Those with higher scores are more likely to leave to buy their own homes, and you could be looking at more vacancies in between lease terms. 

 

Also, some people have trouble paying credit card debt due to medical or other issues, but they always make sure to pay their rent on time. This is why you should always check with former landlords.

 

Finally, don’t automatically exclude applicants with low hourly pay jobs. A big giant salary isn’t always necessary to live on. If your rent is within their means, an hourly job could work out just fine. It’s more important to calculate the income to rent ratio at either 4:1 or 3:1 to estimate affordability for your rental. 

 

As you can see, it’s crucial to consider everything the prospective tenant is responsible for, and to obtain enough information to get a big picture of their suitability as your future tenant. 

 

But wait!

 

You don’t have to do any of this when you buy a MartelTurnkey rental property with one of our property management teams already in place. Our property management teams take care of all landlord issues, from screening tenants to fixing screens! MartelTurnkey properties are true passive income opportunities. To browse available MartelTurnkey rental properties, click here.

 

 

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Why You Should Invest in Dayton

Dayton, Ohio truly is a hidden gem, situated almost exactly between Cincinnati and Columbus, with about an hour’s drive between either city. Columbus is well known, as is Cincinnati. But savvy investors know that Dayton is where the big real estate money can be made. For some of you, this isn’t new information. If you’ve been paying attention, you know that MartelTurnkey has invested in turnkey rentals in Dayton for quite some time. In fact, you can still grab your share of investment properties in Dayton. But if Dayton is new on your radar, read on to find out the reasons why you should be investing in The Gem City.

 

Dayton is an Innovation Hub

 

The Dayton Arcade Innovation Hub is an incubator for startups. It’s 95,000 square feet of space dedicated to driving the creation of new ventures and social innovation. Thanks to a $1.9 million investment, entrepreneurs, creators, inventors and builders have co-working and small office space to collaborate on impactful ventures, launch and manage new businesses, access resources and lead the city of Dayton in the charge toward the future. 

 

Dayton actually has a long history of being an innovation hub. In the 1900s it was the invention capital of the U.S., with residents holding the most patents per capita. Among the long list of inventions that came out of Dayton, you can thank Dayton inventors for the cash register, the pop-top beverage can, the self-starting ignition and, of course, the airplane!

 

Dayton is a Tech Hub

 

Last year, Patrick Hewitt, a vice president with CBRE in Dayton, said, “Dayton is gaining momentum as a tech market.” He couldn’t have been more right. Since then, tech companies Kilele Health, Medical Interface Solutions, and Raider Technologies have received $350k in grant funding from the Technology Validation Start-up Fund, which will help to accelerate the companies’ development and monetization of their tech products in the marketplace.

 

The Air Force Institute of Technology is located in Dayton, near the Wright-Patterson Air Force Base. This institute of higher learning offers postgraduate, professional and continuing education for the entire U.S. Armed Forces. It has over 500 military and civilian faculty and staff. 

 

Dayton is an Aerospace Hub

 

Dayton is home to Wright-Patterson Air Force Base, which houses numerous research & development organizations, such as the Air Force Research Laboratory Headquarters, as well as several universities, making it a top city for real estate investors with demand for updated rental units at a premium. 

 

Kaney Aerospace has invested $1.2 million to buy Dayton property, where it will occupy at least 70% of the building. Kaney has partnerships with GE Aerospace and Boeing, among other aerospace giants. Said a spokesperson for Kaney, “We’ve had a continuous presence in the Dayton region since 2014, and this addition of a dedicated office and research facility will allow us the presence to make an immediate difference to the war-fighting capability of America and our allies.” 

 

Dayton is a Manufacturing Hub

 

Beontag, a self-described business enabler with global reach, offers IoT solutions and graphic and label materials. They’re investing more than $60 million in a manufacturing plant in Dayton, where they will manufacture RFID, lintless and GLM products. The facility is set to be up and running by August of 2024, and will employ about 200 people. Beontag says in the next two years, “it plans to channel its investment into equipment, machinery, and tenant improvements, aligning the factory with the highest international operational standards.”

 

The Westside Makerspace nonprofit organization is expanding its prototype lab space to create a manufacturing hub for workforce development and skills training in Dayton. The investment of $2.5 million emphasizes the confidence that leading companies of all sizes have in the Dayton market.

 

These are just a few of the many reasons why Dayton should be your next investment city of choice. In any investment decision, it’s wise to “follow the money,” and in this case, all roads lead to Dayton. This simple city of about 150,000 residents has transformed itself over the years to become one of the key centers in the midwest. Now is the time to get in with your real estate investment money, and MartelTurnkey is ready to help get Dayton in your real estate portfolio. Check out our available turnkey rental properties in Dayton and contact us with your questions or comments.

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Top 5 Things Real Estate Investors Need to Know for 2024

As we enter 2024, the landscape of real estate investment, particularly single-family rentals, is evolving in ways that demand your attention and strategic foresight. This year is set to unfold under the complex interplay of economic factors, market-specific trends and shifting demographic preferences. Your role as a real estate investor specializing in single-family homes for rental income requires not only an understanding of these dynamics but also an ability to navigate through them with agility and informed decision-making. Here are the top five things real estate investors need to know in 2024.

 

1.  Interest Rates and Mortgage Rates

Expect interest rates to be a major talking point in 2024. While hopes for a return to 3% mortgage rates might be unrealistic, you should plan for rates to hover around 7%. Remember, when mortgage rates drop, home prices rise, so Pick Your Poison. Act fast when you find a viable property, as waiting for a major rate drop is unlikely. MartelTurnkey has an excellent selection of cash flowing homes available now, based on current rates.  And, if the rates drop, your cashflow will rise!

 

 2. Stability of Single-Family Rentals

Single-family rentals are the most stable investment, especially when compared to the volatile stock market, and the condo market, with unpredictable insurance and HOA fees. The interruption of millennial family formation by the pandemic, coupled with a robust job market, is anticipated to drive millennials towards renting single-family homes for starting families. This trend brings both strong rental demand and property appreciation.

 

3 . Market-Specific Trends

Real estate investment in 2024 will be highly market-specific. Don’t expect significant growth in traditionally high-demand areas like San Francisco or Austin; these markets might experience flat appreciation. Conversely, there is a continued strong demand in Midwest markets such as Cleveland and Detroit. It’s vital to research and understand specific market data to make informed investment decisions. At MartelTurnkey we’ve done the analysis for you, and we stand strong in our preferred markets. 

 

4. Inflation Variances

Nationwide inflation is around 4%, but this varies significantly across markets. For instance, cities like Miami are experiencing inflation rates closer to 8%. These variations impact housing affordability, especially in high-demand areas. Preserve your purchasing power amidst such inflationary pressures by buying a property with returns that beat inflation. Our easy-to-read cashflow spreadsheets show you the cash-on-cash return on your property, so you can see you are beating inflation. 

 

5. Stock Market Volatility and Economic Outlook

The stock market is expected to be highly volatile in 2024. Signals from the Federal Reserve, such as potential interest rate decreases, might be interpreted as preparatory measures against economic downturns, hinting at possible recessions. The end-of-year negative manufacturing index adds to these concerns. The stock market currently may not be fully accounting for these potential issues, so any unexpected developments could lead to significant market reactions.

 

As a real estate investor in single-family rentals, your strategy for 2024 should be proactive and well-informed. At MartelTurnkey, our business is finding and flipping properties in solid markets, despite the economy.  We are constantly analyzing where to invest in single family homes with positive cashflow and a strong upside for appreciation.

 

Remember, real estate investment is as much about timing as it is about property selection. We say now is a very good time to buy.  Wishing you a prosperous 2024! Check out our inventory here.

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How to Start Real Estate Investing – A Review

 

Getting started is often the hardest part of doing just about anything, including real estate investing. But once you get started investing in real estate, you’ll find that things get easier and easier, especially when you invest in turnkey rentals. We’ve explained before about how passive turnkey rentals are, and how you don’t need to have years of experience to invest in them. We’ve also talked at length about the tax benefits for landlords and how to get the most from deductions and depreciation. Now, all you need to do is hit the start button. Here’s what to do, broken down into four manageable steps. 

 Step One: Live in the United States

 

Getting an investment loan isn’t the same as taking out a mortgage for a primary residence. We will introduce you to our preferred lenders. If you are looking for your own, for real estate investments, you need to work with a lender that:

 

 – Can underwrite investment properties

 – Can lend in the city where your desired property is located

 – Understands real estate investors’ unique needs

 – Can qualify you as either a 1099 earners or a  W-2 income earner

 

At MartelTurnkey, we’ve built up a network of investor-friendly lenders to make it easy for our clients to buy our turnkey rentals. Our lenders work fast and efficiently to help get your loan application approved so you can start making passive income on your new turnkey rental as soon as possible.  

When you work with one of our lenders, you need to be a resident of the United States, due to underwriting criteria. So if you already live in the U.S., step one is already taken care of! 

 

If you don’t live in the U.S., but you’re still interested in buying a turnkey rental property from MartelTurnkey, that’s still possible you’ll just need to find your own lender. We’ve written extensively about how foreigners can invest in real estate, so this is a good place to start. Remember: you can invest in our turnkey rentals if you don’t live in the U.S., but you’ll simply need to source your own financing.

 Step Two: Get Your Credit Score Over 680

 

According to credit reporting agencies, a FICO credit score of 680 is unofficially rated as “good.” This is the minimum credit score needed if you want to work with one of our trusted lenders. For most people, achieving this step is fairly easy. The average credit score in the U.S. right now is 703. However, if your credit score is a little low, consider making the following moves, summarized below:

Pay off debt – Lenders look for a debt-to-income ratio of about 36%, but this may vary slightly. Talk to the loan officer at your financial institution for their specific guidelines. 

 

Avoid applying for new credit cards – When a potential lender pulls a hard credit report, this temporarily lowers your score a few points, which is the opposite direction in which you want to go.

 

Use cards, but pay them off – Not using your charge cards doesn’t look good either. Use them, but then pay off the balance each month. This will give you a solid pattern of paying on time, which will bring up your credit score.

 

Get rent payments recorded – If you rent from a large apartment leasing agency, you can have your timely rent payments added to your credit report for a small fee. A number of companies offer this service; just ask your apartment building manager for details. Google for a list.

 

Have discrepancies removed – Sometimes lenders make erroneous entries on credit reports. If you find something that’s incorrect, you can file a dispute and possibly have it removed within 30 days, which could bump up your credit score.

 

Monitor your credit – Keep an eye on your credit report. Seeing it creep up month after month can be a strong motivator for you to continue your efforts at improving your credit rating. For a low monthly fee or even free, certain companies offer credit monitoring services, like Lifelock

 

Bear in mind that adjustments to your credit can take 30 days or more to reflect in your credit score. For more information about getting to 680, read our blog post, “How to Improve Credit.”

  Step Three: Save $30,000

 

Most of the turnkey rentals for sale at MartelTurnkey require an initial investment of about $30,000, which includes points and closing costs. If you’ve got steps one and two covered and you have $30,000 to invest, you’re all set to go! 

 

Saving $30,000 is very doable in today’s economy. There are tons of side hustles that you can do to earn that money in this gig economy. We’ve even written about some creative ways to get the initial investment together. Plus, remember that if you self-direct your retirement account, you can use those funds to invest in your first (or second!) turnkey rental. You can read more about that option, too. Once you have your $30,000 saved, you’re ready to shop!

 Step Four: Contact MartelTurnkey

 

You’ll always find a selection of turnkey rentals for sale on our website. They’re all affordable, with initial investments of about $30,000, and our lenders are standing by to approve investors with credit scores of at least 680. Once you see something you like, you can download the financials right from the website to understand the money.  From there, just contact MartelTurnkey so we can get the process started!  

Here’s what you’ll get when you call us. You’ll get a real, live person who can answer all of your questions. MartelTurnkey is a family company, so you’ll be speaking either to Eric, Lynn, Antoine or Etienne.  You’re not a bother to us; you’re the reason we do this work. Our goal is to build long-lasting relationships with our clients; relationships built on trust, transparency and a mutual goal of building wealth through passive income.

 

We want to help as many families and individuals as much as possible to achieve financial freedom through positive cash flow and passive income. Isn’t that what you want for yourself and your loved ones? Four easy steps to financial freedom; that’s all it takes!

 

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A Real Estate Investor’s Guide To The Housing Market

If you read financial news, you will read a lot about the “housing market.” Most of it will seem to circle around homeownership — not real estate investing. Very little breaking financial news directly addresses the concerns of real estate investors … even turnkey single-family real estate investors like the clients of MartelTurnkey.

 

It becomes necessary, then, to learn to “read between the lines” of the financial news — to pick around the details that speak directly to homeowners or aspiring homeowners, and discover the hidden messages that real estate investors can use to select a market, pick a property, and exit with the highest-possible ROI. 

 

Let’s explore the main economic drivers affecting the housing market and discuss strategies for investors to thrive in this environment.

Demand and Supply Dynamics

One of the most fundamental economic forces in the housing market is the balance between supply and demand. This is Econ 101 — when demand for single-family homes outpaces the available supply, prices tend to rise. If you already own real estate in such a market, you may reap the benefit through increased property values … but the market will become more expensive to enter and possibly have less headroom for appreciation. 

 

However, when there is an oversupply of homes, prices can stagnate or even decline. This is bad news for current property owners. The low prices may be tempting, but if there are more available rental homes than there are renters, the new landlord in the market may face long periods of vacancy and disappointing rental rates.  

 

To stay ahead of the game, investors should closely monitor local market conditions, including population growth, employment trends, and new housing development projects. This information can help to gauge the potential for future demand and identify undersupplied areas with strong investment potential.

 

One of the most important metrics to look for is the Th. This measures how fast new homes on the market are getting taken. You should be able to find absorption rates for both purchases as well as rentals. If the current supply of homes is taking an average of only 30 days to get absorbed, demand is red-hot and you might expect to enjoy steep appreciation, high rental revenue, and little vacancy. 

 

If, on the other hand, the housing supply is taking twelve months to absorb, you know houses are sitting on the market and/or vacant, depressing purchase and rent values and possibly portending large vacancy losses for your rental property.  

Interest Rates and Financing

Interest rates play a significant role in the housing market, affecting both property prices and the cost of financing for investors. As interest rates rise, borrowing becomes more expensive, leading to reduced demand for homes and potentially lower property values. On the other hand, low-interest rates can spur demand, driving up prices and rental rates.

 

When rates are low, it may be an opportune time to acquire properties or refinance existing loans to lock in a lower interest rate. During periods of rising rates, home prices can actually go down as mortgages become more expensive. These low home prices can be tempting, but investors should be cautious about over-leveraging and carefully assess the potential impact on their cash flow. 

 

Read more about the impact of changing interest rates on real estate investors here.

Inflation 

Inflation is another important economic factor to consider in the housing market. Higher inflation can lead to rising construction costs, which can put upward pressure on home prices. Moreover, as inflation erodes the purchasing power of money, investors may seek tangible assets, such as real estate, as a hedge against inflation. This increases the demand for new homes, which can also put upward pressure on home prices.

 

For investors who already own rental property, inflation is good news — their property values and rental rates are likely to increase, while the value of their outstanding mortgage debt remains the same and effectively becomes less valuable. Buying investment property into a period of high inflation may be a good idea if you want to protect your cash against inflation — but be careful of overpaying. If inflation slows down, you will enjoy fewer benefits. 

 

Read more about the impact of inflation on real estate investors here.

Government Policy and Legislation

Government policies and legislation can have a significant impact on the housing market, affecting everything from property taxes and zoning regulations to rental laws and mortgage lending practices. As a single-family real estate investor, it’s crucial to stay informed about local, state, and federal policies that could influence property values, rental demand, and the overall investment landscape.

 

Some examples of government policies that could impact investors include tax incentives for homeownership or rental properties, changes to rent control laws, and new regulations on short-term rental platforms like Airbnb.

 

If you need help parsing what you read about the housing market, and wondering what it means for you as an investor or aspiring investor … MartelTurnkey is here to help! We have decades of collective experience monitoring the housing market and using that data to make successful real estate investments. 

 

Please reach out to us any time — we’d be happy to tell you how the local housing market informs the cities and property types we choose for our inventory of turnkey real estate investments available to investors like you.



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Is Your Money Safe?
Reflections on the SVB Collapse, and What to Do About It

Most of us were taught as children that a bank is the safest place to put our money. The interest rates may be pitiful, there’s no protection from inflation … but by golly, you can sleep soundly knowing that the money you put in your bank account yesterday will still be there in the morning. With recent financial news it is worth asking “Is Your Money Safe?”.

 

But what if we woke up one morning to discover that this was no longer the case?

 

The recent collapse of Silicon Valley Bank (SVB) has raised concerns about the stability of the entire banking system. Founded in 1982, SVB became the go-to bank for entrepreneurs and startups. Why not? “Silicon Valley” is right there in the name! It’s the cradle of digital-age innovation. Who wouldn’t want the good luck charm of an SVB bank account? 

 

Then 2020 happened. Among other things, interest rates were reduced to zero and stimulus money flooded the economy. Banks and individuals had a problem that you would never in a million years think of as a problem — too much money. 

How Does A Bank Fail Because Of “Too Much Money?”

What does that even mean? How does “too much money” add up to disaster?

 

US banks operate on a principle called “fractional reserve banking.” Under this principle, a bank is required to keep cash in reserve … but not every dollar on their deposit books. They only have to keep a fraction of the grand total of customer deposits on hand. 

 

The Federal Reserve sets what that reserve fraction will be. Let’s say they set it at 10%. If bank customers have a total of $100 million on deposit with that bank, the bank is only required to keep $10 million in cash on hand at any given time. 

 

That’s why a “run on a bank” is so dangerous. If every customer somehow showed up on the same day and demanded their money back, the bank simply would not have it.

 

Well, buckle up … in March 2020, the Federal Reserve reduced the reserve requirement to 0%. Banks no longer had to keep any percentage of their deposits as cash-on-hand … leaving them free to lend it out and invest it as they saw fit. 

 

How did SVB use that freedom? It invested heavily in government-backed bonds with a significant portion locked away for three to four years at an interest rate of just 1.79%. 

 

See the problem? When high interest rates and inflation hit, those investments immediately revealed themselves to be losers. Who wants to be holding 1.79% bonds in a 7% interest rate environment and an inflation environment of nearly 8%?

 

At the same time, SVB’s biggest customers — the tech companies — saw their revenues take a hit due to the exact same economic forces. At a key moment, SVB found itself unable to raise capital, and Federal regulators stepped in and shut the bank down. 

Will SVB Customers Get Their Money Back?

So what happens to all the money on deposit at SVB, with little or no fractional reserve requirement to cover it? It’s FDIC-insured, right? The government will pay. Right?

 

Actually, wrong. FDIC only insures balances up to $250,000. Only 2.7% of SVB’s deposits are less than $250,000, meaning 97.3% of their money is not FDIC insured, leaving the fate of that money uncertain. 

 

Now, the Federal government has stepped in to guarantee 100% of depositors’ funds in the SVB debacle … but if they hadn’t, customers with more than $250k on deposit would be stuck waiting to recover their money in a bankruptcy court, a process that could take years and result in only partial restitution.

Is This an SVB Problem, or an Everyone Problem?

Everyone, potentially. The SVB failure could ripple through other banks and companies, as it was a major bank for venture-backed companies in the US. With over $342 billion worth of customer funds held by SVB, the collapse could cripple many businesses that relied on these funds for growth. 

 

And if more banks fail, who knows if the Federal government will be able to guarantee all the affected deposits. There’s only so much money in the US Treasury, and our national credit card is already overtaxed. 

So if banks aren’t safe … what now?

If you’re scared, I don’t blame you. What do you do with your money if you can’t trust a bank of all places?

 

Here’s what to consider:

 

Don’t keep more than $250,000 in any single bank. As long as your deposits in each bank are under $250,000, you still have FDIC insurance (for what it’s worth).


Choose larger, more diversified banks. Will FDIC insurance always save you? Better question — wouldn’t it be nice not to have to find out? Give yourself that peace of mind by choosing a bank that is less likely to fail due to more sound reserve and investment policies. 


Diversify your own assets! In this era of high inflation, consider shifting from cash to real assets — like cash-flowing real estate. The US has a strong history of defending property rights, and with a real asset like rental property, you have the security of owning a scarce, in-demand resource that will rise with inflation, rather than lag behind it like cash.

 

If you’re ready to take some of your money out of the wobbly banking system and put it into cash-flowing, inflation-resistant property, it doesn’t have to be difficult — MartelTurnkey has you covered. We constantly replenish our inventory of cash-flowing rental real estate available for our turkey investors. 

 

Click here to see what properties we currently have available.

 

Click here to watch Eric Martel’s YouTube video on this topic.

 

 

Want to take some cash out of the struggling system and quickly transition it into something real? Reach out to us today!

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The 1031 Exchange — How It Saves You Taxes, and How to Do It Correctly

Whether you’re a seasoned real estate investor or new to the game, you may have heard about the 1031 Exchange – a powerful tax-deferral strategy that allows you to defer capital gains taxes on investment property sales. One of the biggest problems we solve at MartelTurnkey is to help our investor clients execute successful 1031 exchanges.

 

Let’s take a look at what a 1031 exchange is, how it works, its benefits and drawbacks, and how we help investors take advantage of this valuable tool.

 

What is a 1031 Exchange?

A 1031 exchange, also known as a like-kind exchange or a Starker exchange, is a provision in the U.S. tax code (Section 1031) that allows real estate investors to defer paying capital gains taxes on the sale of an investment property by reinvesting the proceeds into a new, qualifying property. The primary goal of a 1031 exchange is to enable investors to reinvest their profits and defer taxes, allowing them to grow their investment portfolios more efficiently.

 

How Does a 1031 Exchange Work?

 

Sell the Relinquished Property. The investor sells the original investment property, referred to as the “relinquished property.”

 

Identify Replacement Property. Within 45 days of the sale, the investor must identify up to three potential replacement properties. These properties must be of like-kind, meaning they must be of the same nature or character, regardless of their quality or grade.

 

Purchase Replacement Property. Within 180 days of the sale of the relinquished property, the investor must complete the purchase of the replacement property.

 

Use a Qualified Intermediary. To ensure compliance with IRS rules, a qualified intermediary (QI) must hold the proceeds from the sale of the relinquished property during the exchange process. The QI will transfer the funds to the seller of the replacement property when the transaction is finalized.

 

Benefits of 1031 Exchange

 

Tax Deferral. The primary benefit of a 1031 exchange is the ability to defer capital gains taxes, which can be as high as 20% for federal taxes, plus any applicable state taxes. This allows investors to use the full amount of their profits to acquire new properties, increasing their overall investment potential.

 

Portfolio Growth. By deferring taxes, investors can more rapidly grow their real estate portfolios, taking advantage of the power of compounding and leveraging their investments for greater returns.

 

Flexibility. A 1031 exchange allows investors to adjust their investment strategy, diversify their portfolio, or change property types without incurring immediate tax liability.

 

Drawbacks of a 1031 Exchange

 

Strict Deadlines. The 45-day identification window and the 180-day purchase deadline are inflexible, and failure to meet these deadlines may result in the disqualification of the exchange, resulting in immediate tax liability.

 

Complexity. The process of completing a 1031 exchange can be complicated, and investors must follow specific rules and regulations to ensure compliance with the IRS.

 

Dependence on a Qualified Intermediary. The use of a QI is crucial for a successful 1031 exchange, but finding a trustworthy and experienced QI is essential, as they will hold the proceeds from the sale during the exchange process.

 

How MartelTurnkey Can Help With Your 1031 Exchange

MartelTurnkey can help you execute a successful 1031 exchange in a number of ways. Here’s how:

 

Property Identification. No need to sweat that 45-day property identification deadline. MartelTurnkey always has a selection of cash-flowing turnkey rentals ready to go. Click here to browse our current offerings.

 

Meet The Deadlines. In addition to sourcing properties, we also pair our investors with professionals who know how to get the job done quickly. You don’t have to worry about that 180-day closing deadline either — our teams can get it done.

 

Get It Done Right. In addition to pairing you with professionals who can meet the closing deadline, we can also refer you to reputable QIs who will make sure that the complex paperwork is done correctly. 

 

 

Considering a 1031 exchange? Or considering acquiring your first investment property so you can take advantage of a 1031 exchange in the future? Reach out to us today!

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Exploring Euclid, Ohio:
Insights on Real Estate, Demographics, and Safety

Euclid, Ohio is popular with investors seeking appreciating turnkey rental properties.  Having renovated and sold over 50 houses in this city, we have watched it appreciate and improve over time.  House values continue to increase and rents remain strong. Join us as we explore 12 criteria that make this city so popular with investors.

 

Affordability: Euclid offers a more affordable cost of living than many other cities in the Cleveland area, making it an attractive option for those looking for a more budget-friendly location.  For investors, this means cash flowing houses can be purchased for under $150,000.

 

Proximity to Cleveland and airports: Euclid is just a short drive from Cleveland, providing easy access to all the amenities and attractions of a larger city. At the same time, the large yards and recreation amenities attract young families from the city. Euclid is also located just a short drive from Cleveland Hopkins International Airport, providing easy access to domestic and international travel.

 

Growing economy: Euclid has a diverse economy, with a mix of industries including manufacturing, healthcare, and education, which helps to provide stability and growth opportunities. Cleveland Clinic and Amazon are two very big employers in Euclid.

 

Strong housing market: Euclid’s housing market has remained relatively stable, with a healthy mix of both new and established homes.

 

Community events: Euclid offers a variety of community events throughout the year, from festivals to outdoor concerts, providing opportunities to get to know your neighbors. A strong sense of community makes for long term residents.

 

Access to Lake Erie: Located on the shores of Lake Erie providing access to beaches, boating, and other water activities. The new Euclid Lakefront Trail is a popular destination for walkers, runners, and cyclists, offering scenic views of Lake Erie and nearby parks and green spaces. It also serves as an important link in the larger network of trails and paths in the Cleveland area. It is part of the Lakefront Bikeway, a system of bike paths that spans the entire length of the Cleveland lakefront, and connects to other trails and paths throughout the region….which leads us to….

 

Parks and recreation: Euclid has a number of parks and outdoor recreational areas, including Euclid Creek Reservation and Sims Park, which offer hiking trails, playgrounds, and picnic areas. Briardale Golf course is here, C.E. Orr Arena and don’t miss the Polka Hall of Fame!

 

Schools: Euclid has a number of highly-rated public and private schools, providing families with access to quality education options.

 

Access to healthcare: Euclid has a number of healthcare providers, including Euclid Hospital and Cleveland Clinic Euclid Hospital, ensuring that residents have access to quality medical care. Cleveland Clinic is one of the top rated hospitals in the country, in fact it’s been named The Number One Hospital in the country for cardiology and heart surgery for more than 20 years.

 

Historic architecture: Euclid has a number of beautiful historic homes and buildings, providing a unique and charming aesthetic to the city.

 

Diversity: Euclid is a diverse community with a mix of different cultures, backgrounds, and ethnicities.

 

Safety: Euclid is generally considered a safe community with a relatively low violent crime rate compared to other cities in Ohio. The Euclid Police Department works hard to maintain public safety and provides resources and programs to help prevent crime and increase community engagement.

 

Overall, Euclid offers a variety of benefits, from affordability and a strong sense of community to access to outdoor recreation, job opportunities, and quality healthcare. These factors make Euclid an attractive option for those looking to buy property in Ohio. We currently have several houses available in Euclid. Click here to see our inventory and add a Euclid house to your portfolio.