Turnkey Rental Real Estate
Own Rental Property Without Becoming a Landlord – The Smart, Passive Way to Become a Real Estate Investor
- Are you looking for predictable, stable cash flow?
- Do you want an investment that can produce high cash flow AND appreciation?
- Are tax benefits an important part of your investment strategy?
- Do you want to own real estate without having to do renovations or being a landlord?
- Do you want a partner with years of experience and hundreds of deals under their belt?
If you’re tired of the wild ups and downs of the stock market, looking to diversify, or just need your investments to start providing stable, reliable income month after month, then a turnkey investment could be exactly what you’re looking for.
Turnkey real estate is the closest way to achieve passive real estate investing while maintaining complete control and total ownership of your asset.
Meet Our Turnkey Rental Partners
Based out of Birmingham, AL, Spartan Invest is our go-to partner for turnkey rentals. Founded in 2010, Spartan Invest now helps investors purchase about 300 properties per year.
Operating in Memphis, TN & Little Rock, AK, MidSouth Home Buyers is one of the most experienced turnkey providers in the business.
How the Turnkey Process Works
Our turnkey partners analyze hundreds of available properties per week and only select the small fraction of potential properties that fit their strict requirements for what makes ideal long-term rentals for their clients… you.
Next the provider will purchase the most desirable properties. Maintaining plenty of capital allows them to secure the best deals by purchase quickly with cash.
The turnkey providers will then perform a full renovation of the property replacing and renovation all major systems of the property, including the roof, HVAC, electric, and everything that commonly causes repair costs to investors. They utilize streamlined processes, economies of scale, and years of experience to make every property as “loss-proof” as possible to investors, even selecting specific flooring types and eliminating specific amenities to maximize returns.
Don’t get me wrong, these homes are renovated cheaply, but rather efficiently. They are beautiful and desirable for both tenants and investors.
Our providers have dedicated investor sales and service teams to help both first-time and experienced investors every step of the way. They assist in property selection, financing (if desired), insurance, property taxes, and every other little facet of the process.
This is the most “active” part of the process for investors. The next step for investors is to begin receiving their rental cash flow 😀.
Following the purchase and closing, investors usually automate insurance, tax, and mortgage payments while automatically receiving their monthly rents. They can expect regular communication from the providers and to only be involved if bigger decisions need to be made.
Finally, our turnkey partners provide ongoing management of BOTH the tenants and the property. Having satisfied tenants is one of the keys to a profitable turnkey, and our providers understand that this begins with selecting the right tenants and continues by providing them excellent service.
Inevitably tenants move out and whenever that time comes, our providers will handle all of the “turnover process” making any small repairs and touch-ups as needed. And if larger repairs become necessary our providers handle this in-house or with consistently used contractors to keep all costs as low as possible and ensure that repairs are done properly.
What is Biblical Wealth Solutions’ role in turnkey investing?
Jared Williams personally contacted and interviewed over 25 turnkey rental providers nationally to select the very best partners for our clients to work with. Jared and our team can work directly with investors to help determine if turnkey rentals are an asset class that fits with the unique goals and preferences of interested investors. We can help determine how turnkey rentals would work within an overall investment or retirement income strategy. We can also help determine which provider would be a better fit.
We do not need to be involved in the purchasing process; our providers are excellent at what they do. However, we’re always happy to hop on call if an investor wants us to consider a decision with them.
How does Biblical Wealth Solutions make money if I invest in a turnkey rental property?
Biblical Wealth Solutions is paid a flat referral fee for every property purchased by one of our referrals. This fee comes out of the marketing budget of the provider and is a cost to them. It does not affect the investor’s purchase price, property management fee, or any other way the performance of their property. So basically, it doesn’t cost you anything, and that’s how we like it!
For this reason we really appreciate you clicking the buttons above and letting us introduce you via email to the provider. There’s no reason not to and we have lots of mouths to feed 😀.
What kind of returns should I expect?
Cash on cash (CoC) returns are likely to fall between 7%-10% per year impacted largely by the purchase price (lower is usually better) and property taxes of the home. Additionally, there is potential appreciation of the property values, though appreciation is not the goal of most turnkey investors. If the property is financed, you will also experience guaranteed equity growth as the tenant pays down the mortgage. You can read more about guaranteed equity growth through financing here.
Additionally, if investing outside of retirement accounts, turnkey rentals can have tax benefits to further increase the overall return on investment.
What are the risks?
Because investors directly own and control turnkey rental properties, there are only two primary risks that need to be considered. They are vacancy (or any loss of rents) and repairs/maintenance. Tenants move out and there will be occasional vacancies and turnover costs. These providers are skilled at minimizing both, but there will be years when returns are less due to these loss of rents and/or costs.
One of the benefits of working with a turnkey provider is that each property is newly renovated by professionals (no DIY here). So major repairs and maintenance costs are not likely to occur for ~10+ years after purchasing.
Property damage and liability risks should be transferred using rental property-specific insurance.
How are Spartan Invest & MSHB Different?
Spartan Invest & MidSouth Home Buyers are very similar in their process and level of service and both are excellent providers, but they do have a few important differences.
The biggest difference between the two is their availability of properties. Spartan Invest maintains available properties and can help investors purchase one or even multiple properties on demand. This allows investors to be more selective and compare different features of the available properties.
MSHB, having been in business longer, has a larger investor base and utilizes a waitlist for investors to acquire new properties. Their waitlist is approximately 9 months from requesting to be on the waitlist until being offered a property, and only one property can be purchased at a time. With that said, they have very satisfied investors most of whom buy multiple properties from them over time (hence the waitlist).
The other key difference is in their purchase price and resulting cash flows. MSHB’s properties range from ~ $60k-$100k on average and generate around 8%-10% cash on cash (CoC) returns for cash (non-financed) purchases. Spartan Invest’s properties range from ~ $80k-$120k and generate returns around 7%-9% non-financed CoC returns. Financing will increase CoC and overall return on investment. While turnkey rentals are focused on cash flow, it is likely that Spartan Invest’s properties would experience somewhat more appreciation.
If an investor wants to put money to work right away or especially if he/she would like to purchase multiple properties at once, then Spartan Invest would be the better option. If an investor is ok with being on a waitlist and plans to purchase no more than one property per year, then MSHB will make a great partner. Of course, you can always work with both 😉.
Do you recommend financing or buying with cash?
It depends. I’m personally a fan of financing, but for the most part this comes down to preference. Click here to read my full analysis on financing vs cash. If you’re investing through a self-directed IRA, then let’s talk; financing is MUCH more complicated.
Can I invest in turnkey rentals with my IRA?
Yes. You can have a “self-directed IRA” (or Roth IRA) and use the money for turnkey investing. This works fine if you plan to purchase with cash. If you planned to finance, then let’s talk. Financing is more complicated with IRA money.