Struggling to find good real estate investments with my Realtor, I was convinced he simply did not understand what I was looking for.
So I decided to take a real estate course for the sole purpose of having access to the Multiple Listing Service.
By getting my real estate license, I thought, I could learn more about the intricacies of real estate and gain access to the MLS so I could have a first-hand glimpse at the latest properties and have better control over the inventory.
I learned in the real estate course that only 3 percent of Realtors actually invest in real estate themselves. I found this to be an interesting statistic and perhaps explained why it was such a struggle to grab the attention of good Realtors when I talked about investing.
I found a better way
As an investment Realtor, I was having a great time helping investors find property.
Knowing what investors wanted, I simply searched property that would make a good investment and promoted that investment. I was filling a much-needed niche as an investor-focused Realtor.
My biggest challenge was finding enough properties that made financial sense to invest in. Then, I discovered the world of unlisted property. I discovered that unlisted properties were indeed the answer for me and all my investors who were looking for the long-term-hold type of passive investment.
Top 5 reasons unlisted turnkey properties are a better choice
• Unlisted property is investor focused:
What I discovered, and was eager to share with my investor clients, was that the MLS system is designed to attract the retail buyer. It is a platform where homebuyers and sellers go to buy and sell personal residences. Investors need a different platform from which to buy and sell investment properties. These properties are logic-based purchases, as opposed to the emotional-based purchases that the MLS system attracts.
• Properties are a performing asset:
Like buying a business in a box, I found that unlisted turnkey properties typically already have a tenant in place as well as all the expenses established. No more guessing what your ROI will be. Performing assets have all the income and expense pre-established and will be a performing asset from Day One as you close on the property.
• Located in best micro-markets:
Everyone knows that real estate is all about location. For the real estate investor, the location is within the best markets and the best micro-market. The turnkey property companies acquire these properties with knowledge of the best streets and locations near the best schools and access to employment that the end user will want. This of course creates the desired exit strategy for the long-term-hold buyer who wants to buy property that he can sell in the future to the retail buyer.
• Sellers have a vested interest in your success:
What you will find with turnkey companies is they have vested interest in the long-term profitability of your investment. Turnkey property companies buy properties, rehab them and manage the properties. Their business model is to sell these properties to investors. These sellers therefore are very motivated to give you a great product at a great price, with good quality property management in place. Unlike an MLS seller, these sellers want to do business with you again and again. The only way to accomplish this is to make sure you have a great investment worth owning, so they continue to strive for that outcome. It is like having a great business partner who is performance-based.
• Economies of scale pricing:
Possibly one of the best things my investors and I like about these turnkey companies is the economies of scale pricing. Everything from the acquisition of the properties — they often buy in bulk — to the rehab where they buy supplies in bulk, to the property management and repairs. All have the benefit of economies-of-scale discounts.
I have found that when it comes to long-term investing in cash flow real estate, those turnkey companies are the investors’ ultimate win-win. The sellers are investors themselves and therefore are investor-focused and create the exact type of product the investor is looking for. The economies of scale they can create with every aspect of investment is so much more cost-effective than anything that any individual investor could duplicate himself.