If you are one of the 25 million Americans that has watched Chip and Joanna Gaines effortlessly do their thing on “Fixer Upper”, HGTV’s hit show, chances are you have thought to yourself, “Hey I could do that!” There is no denying that there has been an absolute explosion of interest in the home flipping market, and the number of shows dedicated to the industry are a testament to that growth. Television shows like “Fixer Upper” and “Flipping Out” have given the industry a wider audience than ever before, and make the real estate investment world look approachable and even fun.
Looking beyond reality television, data trends validate the growth of the size of the house flipping and real estate investing market. During the real estate boom of the early 2000s, where inventory was cheap and mortgages easy to obtain, many Americans played their own hand within the real estate investment market. While many of these house flippers ended up on the losing end of the real estate crash, the market has enjoyed a healthy recovery. An analysis from Core Logic Inc. assesses that close to 11% of all homes sold during the fourth quarter of 2018 in the US were designated as “flips” – or homes that were resold within two years of the original purchase date.
With data clearly painting a picture of a healthy real estate investment market, many first time and experienced investors want to get in on this opportunity. However, it is important to note that despite this steady growth, returns – or the money actually made through real estate investing – can be widely sporadic. So why is this? What makes two investors, with similar experience, background and investment dollars, generate such different results along their real estate investment journeys?
Perhaps Chip and Joanna Gaines make it look too easy. The stark reality is that the real estate investing market is filled with complexities and nuances, risks and unexpected plot twists – and is not nearly as easy or straightforward as reality television makes it out to be. While many may think that the most significant investment they will have to make to be successful in the real estate game is money, there is another investment that is just as important, yet is often grossly underestimated – and can make or break a successful real estate investor’s business – and that is the investment of time. Many new investors can take for granted the complexity and level of expertise needed to successfully navigate the real estate investing market. It is easy to quickly lose steam as obstacles associated with rehabbing, renting and managing their property portfolio come up – and one thing that is certain, they will come up.
That’s exactly how Lance, a real estate investor in Austin, TX felt early on in his real estate investing journey. He wanted to spend less time on his real estate properties, but didn’t want to lose the momentum he was gaining and the incremental income he was started to realize. He learned he didn’t have to go it alone. That’s when he made his first turnkey property investment. “I purchased my first turn key property in 2015, but I had invested in other properties before I went the turnkey route. I like the idea of market diversity, the turnkey has worked with me on everything really well. I have had a great experience and it hasn’t taken up much of my time which is exactly what I was going for.”
Investing with a turnkey provider can be a fantastic way to get started quickly and passively. The services a turnkey company provides alleviates much of the burden associated with real estate investing by finding, rehabbing and getting the property movie-in ready – significantly reducing the investor’s time between purchase and cash flow. Through leveraging their expertise, turnkey property companies are an option for investors who want to make money without doing much of the heavy lifting associated with real estate investing.
Not all turnkey companies are created equal however, and an interested investor should do their due diligence to identify the best partner that can help them reach their goals. But with the right turnkey property partnership, turnkey investments can enable you to diversify your real estate financial portfolio while alleviating many of the risk and obstacles associated with going it alone.
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