Welcome to the Monthly White Coat Investor Real Estate Newsletter!
Thank you for being a member of the WCI Real Estate Opportunities Group! We hope you find the enclosed information and introductions helpful. Remember that we have a financial relationship with each company listed in this email, you generally need to be an accredited investor to invest, and you are still responsible for any necessary due diligence. Consider these to be introductions, not recommendations. This newsletter should be the first step in your due diligence process, not the last one.
Special Announcements
Don't miss out on a special live real estate investing webinar on November 12, 2024 at 6pm MT with Dr. Dahle. The free webinar will include the following topics and a live Q&A:
- How Current Interest Rates Are Impacting the Real Estate Market
- How Real Estate Can Fast-Track Your Financial Freedom
- Pros and Cons of Real Estate Investment Strategies
- Choosing the Right Real Estate Investments for YOUR Portfolio
- How to Maximize Massive Real Estate Tax Deductions
Sign Up Today To Join Dr. Dahle at the Free Real Estate Investing Webinar!
Today's Topic: Are Turnkey Properties a Good Investment?
If you're looking for a rental home that doesn't require much upfront work to expand on your passive investment strategy, a turnkey property may be a good choice. That's because when you buy a turnkey property, there's very little you need to do to manage or maintain the property.
When you buy a turnkey property, it's immediately available to rent out. The property has already been fully renovated and repaired, and it may even come fully furnished. In many cases, there will already be a tenant living in the home, and it may even come with a property manager. Because there are no updates required, turnkey properties are more expensive than other rental properties. However, they're an attractive option for investors who don't want to wait months to begin making money. And since the home might already come with a property manager, you might not have to spend your time dealing with tenants.
But turnkey properties aren't the best fit for every investor, so you should consider the pros and cons first.
Pros of Turnkey Properties
- Start making money immediately: A turnkey property has already gone through the necessary repairs before you buy it. In comparison, a traditional rental property may require months of repairs before it's ready to rent out.
- Saves you time: Turnkey properties often come with a property manager who handles the day-to-day tasks for you. If an appliance breaks, the renter will call the property manager who will handle the situation on your behalf. This allows you to take a hands-off approach, and it can save you a lot of time.
- Fewer surprise costs: Anytime you buy a property and plan to update it yourself, there's always a good chance the repair costs will be higher than you initially anticipated. You can never completely eliminate unexpected costs, but they'll likely be lower with turnkey properties.
- Invest anywhere: Because you don't have to regularly visit a turnkey property to make repairs or deal with tenants, you're not limited to a specific geographic location. Having a property manager who handles these tasks for you means you can buy a home anywhere in the country.
Cons of Turnkey Properties
- More expensive: Because turnkey properties have already been renovated and often come fully furnished, they're more expensive than other rental properties. That means you may need more upfront capital to buy the property, and you may have to rent it out for more money to earn a profit.
- Less control: When you buy a turnkey property, your success is largely determined by the quality of the property manager. If you get stuck with a bad property manager who chooses the wrong tenants or doesn't sufficiently maintain the home, your investment could tank.
- Mediocre returns: When you buy a rental property and fix it up, it tends to appreciate in value very quickly. In comparison, turnkey homes appreciate in value much more slowly, and they can even decrease if that market suddenly shifts.
- Potential for scams: Properties are often advertised as turnkey but have hidden problems that are easily overlooked, especially if you can't view the property in person.
With all of that said, are turnkey properties the best choice for you? Maybe, but you need to do your homework first. Visit the property in person, even if that means flying to another state. When you visit the property and walk through it, you'll see things that are easy to hide in an online listing. For example, you'll notice if the furniture is old and outdated or if the house desperately needs to be painted. You'll also get a sense of whether the neighborhood is growing, which should play a huge role in your decision.
You should also spring for a home inspection, even if you don't think the property needs it. A home inspection can uncover hidden problems, and a good report will give you peace of mind.
Finally, make sure you understand the fine print before buying any house. If the home already comes with tenants, can you evict them if they stop paying their rent? Can you get rid of the current property manager if you're unhappy with their performance? Doing your due diligence will increase the odds that you'll find an excellent property and get the best returns on your investment with fewer headaches than other kinds of direct real estate investing.
Recently Published Articles That Relate to Real Estate
Check out these recent articles and podcasts that relate to real estate from across the WCI Network:
- The 20 States Real Estate Investors Should Avoid Unless They Love Filing Tax Returns
- Does It Make Sense for Doctors to Rent Forever?
- Buy This, Not That
Current Real Estate Opportunities
DLP Capital (Multiple Funds)
DLP Capital is an impact investment company that is focused on doing well while doing good–meaning working diligently to provide great returns to investors while simultaneously tackling four crises in our country. Their investments are straightforward, easy to understand, and historically profitable. They relaunched their fund portfolio to ensure their offering aligns with their primary mission. DLP Capital offers five funds giving more options to a wider range of investors– two that are new to the market and three existing funds. All funds have the following criteria: 1) all DLP funds are evergreen, 2) they invest in critical workforce housing, 3) they are targeted to provide above-market returns, and 4) they pay preferred returns before DLP takes a management fee.
To learn more, watch the DLP Capital Webinar.
Check Out DLP Today!
MLG Capital (Multiple Funds)
MLG Capital is a real estate investment firm, founded in 1987. Focused on serving accredited investors, investment advisors, family offices, and more. Each of the MLG Private Funds target to acquire a geographically diverse portfolio of 25-30+ commercial real estate assets across several key U.S. markets.
Since its inception, MLG Capital and its associated entities have had active, exited or pending investments of nearly 46 million square feet of total space across the United States, inclusive of more than 39,000 apartment units, with exited and estimated current value exceeding $±.6.7 billion.
MLG Private Fund VI is open for investment.
To learn more, watch the MLG Capital Webinar.
Check Out MLG Capital Today!
Southern Impression Homes (Turnkey Homes)
Southern Impression Homes is the parent company of one the most successful Build To Rent Ventures in the United States. They specialize in helping individual investors build successful rental portfolios in high growth, landlord friendly markets in Florida. Focused on new construction homes in desirable neighborhoods designed to maximize landlord profit with better inventory, less tenant turnover, lower maintenance and repairs and a better overall growth strategy for both rents and values. Their system provides full-service in acquisition, building, construction, property management and ongoing client support and education. Most clients come to SI Homes looking for an alternative to the stock market because SI's strategy creates ongoing cash flow, real estate appreciation and an excellent hedge against inflation. For the right investor, their system delivers amazing results to help overcome those issues quickly and completely.
To learn more, watch the Southern Impression Homes Webinar.
Check Out Southern Impression Homes Today!
Origin Investments (Funds and Syndications)
Origin Investments is a private real estate fund manager that helps individual investors protect and grow their wealth by providing tax-efficient real estate investments in the multifamily sector. We build, buy and finance multifamily real estate projects in fast-growing markets throughout the U.S. We also offer credit Funds through our affiliate firm, Origin Credit Advisers, an investment advisor registered with the SEC.
Since our 2007 founding, we have executed over $3.6 billion in real estate transactions and our principals have invested over $90 million alongside our investors. We rely on our market experience and employ MultilyticsSM, our proprietary suite of machine-learning models that forecast rent growth, to help us choose the best properties and markets for investment.
We are accepting new investors for our open QOZ Fund III and IncomePlus Fund, which seek to provide tax efficiency, enhance portfolio yield, maximize growth and minimize portfolio volatility. Additionally, we have recently released Origin Exchange, our newest offering aimed to simplify the 1031 exchange process. Our affiliate firm, Origin Credit Advisers, also offers the Strategic Credit Fund, a private credit Fund open to qualified purchasers (an individual or a family-owned business that owns $5 million or more in investments, excluding their primary residence or any property used for business). The Strategic Credit Fund's objective is to provide a consistent stream of risk-adjusted income with capital protection.
To learn more, watch the Origin Investments Webinar.
Check Out Origin Investments Today!
Wellings Capital (Fund)
- Instant diversification across private real estate asset types, operators/sponsors, geographies, properties, and strategies
- Extensive, professional due diligence on operators and properties
- Access to deals and operators
- Better terms
To learn more, watch the Wellings Capital Webinar.
Check Out Wellings Capital Today!
37th Parallel Fund II (Fund and Syndications)
37th Parallel has been doing multi-family syndications for years. Since their inception in 2008, they've completed over $1.1 billion in multifamily transactions while maintaining a 100% profitable investor track record. Their Income and Total Return Fund II is now open for investment. This $40M-$80M fund has a $100,000 minimum. Fund II is focused on acquiring and improving 200-plus unit Class A & B apartment complexes in 13 markets across Texas, North Carolina, South Carolina, Florida, and Georgia. Capital will be called as needed to acquire properties with a goal to have all investors' capital called within 12 months. Their goal is to begin liquidating or recapitalizing fund assets in seven to eight years from inception. Fund II has two share classes - Class A (Current Income) and Class B (Total Return). Class A shares have a 9% annual preferred return and first access to cash flows from operations but capped upside. Class B Shares have a 7% annual preferred return and second access to cash flows from operations along with an initial 80/20 split. We have negotiated a $500 fee discount for you if you go through our links. If you prefer individually choosing which properties you invest in, 37th Parallel still does individual syndications too at a $50,000 to $100,000 minimum investment.
Check Out 37th Parallel Fund II Today!
Mortar Group (Syndications)
Mortar's approach to investments is simple. We are a vertically integrated firm with an experienced team that delivers consistent returns. Specializing in multi-family real estate, Mortar has been the driving force behind over 30 distinctive and successful developments in prime and niche New York neighborhoods since 2001. We leverage over two decades of experience in architecture, development, and asset management to build value and minimize risk for both investors and the residents who live in them. Our winning combination of high-returns and risk-adjusted strategies has led to an excellent track record of investment success.
To learn more, watch the Mortar Group Webinar.
Check Out Mortar Group Today!
EquityMultiple (Real Estate Platform)
Offers equity and debt investments to accredited investors. Equity Multiple is very transparent and invests alongside its investors in every deal, which is unique for a real estate platform. Since it has skin in the game, I expect EquityMultiple to be a little more conservative with its due diligence. Its volume is not as high as some companies, but perhaps that is a reflection of the higher quality of the deals that do show up. Minimum investments are typically $5K-$20K.
Check Out EquityMultiple Today! (Management fee waived on your first investment when using this link)
Fundrise (Private REIT Provider)
Fundrise offers REITs and funds to non-accredited investors. It now has 7 REITs/Funds with various focuses, including income, growth, and various geographic areas. Minimums are the lowest we've seen, just $500.
Check Out Fundrise Today!
We hope you find these monthly newsletters helpful. We appreciate your feedback, both positive and negative, about the real estate opportunities you learn about here and elsewhere.
Jim and Brett
Jim Dahle, MD, FACEP
Founder, The White Coat Investor
Brett Stevens, MBA
COO, The White Coat Investor
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