Ep 84: Investing in Turnkey Real Estate with Marco Santarelli
Investing in a turnkey rental property can boost your investment portfolio and requires little to no work after buying, but there is a difference between buying turnkey and buying rental-ready. Today’s guest is Marco Santarelli, who gives us an overview of what turnkey real estate investing is, how it works, and profiles an ideal turnkey investor. Marco is a real estate investor, author, and founder of Norada Real Estate Investments, a national real estate investment firm offering turnkey investment property in growth markets nationwide. He purchased his first property at the age of 18, and went on to get his real estate license and sell residential real estate for three years before leaving real estate sales to pursue other active business ventures. Because of his passion for real estate, and his desire to help others succeed in building their wealth through real estate investing, he eventually returned to real estate investing and founded Norada Real Estate Investments in 2003. In this episode, Marco tells us the difference between turnkey and rent-ready, explains why he chose to go into turnkey investments rather than coaching and shares some tips and tricks for buying in the right asset class, setting up LLCs, and how to find the right turnkey provider. Tune in today!
Key Points From This Episode:
Marco introduces himself and shares a bit about his journey in real estate and what he does.
Some people use the term turnkey, but they’re really selling what Marco calls rent-ready.
Marco’s transition into full-time real estate after cofounding a Dotcom business in 1998.
If you are not cashflow positive, your business will fail during a recession, says Marco.
Marco got back into real estate full-time through a Nothing Down Real Estate bootcamp.
Marco talks about some of the parallels between the Dotcom crash and today’s recession.
There is more and more interest in investing in income-producing assets like real estate.
Why Marco chose to go into turnkey investments rather than coaching, and some early mistakes he made, like buying cheap.
The issues with buying D-class properties and why Marco suggests you should avoid it.
Looking at the numbers and budgeting for a vacancy allowance – Marco uses 5% default.
When buying a first property, you need three to four months of gross rent as operating capital.
Treat your rental portfolio as a business – hold titles in LLCs for asset protection purposes.
Don’t hold back on buying property because you’re caught up in the structure of your LLC!
Good turnkey providers offer a high level of service, an experienced team, and access to quality inventory.
Other important things about your turnkey provider include communication and reputation.
To establish that a turnkey property or provider is credible, Marco says trust, but verify.
Confirm cashflow, professional inspect the property, and just do your due diligence.
People tend to pre-screen themselves before reaching out to Marco because of the volume of content they share.
“Some people use the term turnkey, and they’re really selling what I call rent-ready. It’s something that has capital expenditures coming up or maybe it has deferred maintenance items on it, and sure, yeah, there may be a tenant in there and it’s cashflow positive, and it may also be professionally managed, but I don’t take that as being fully turnkey.” — @MarcoSantarelli [0:04:29]
“You have to differentiate between stuff that is good that is less expensive versus cheap.” — @MarcoSantarelli [0:14:00]
“You should treat your rental portfolio as a business, so it’s separate from you. First of all, never hold title in your own personal name, always hold title separately in an entity like an LLC. That’s the most favored entity that investors use for asset protection purposes.” — @MarcoSantarelli [0:26:42]
“Ronald Reagan once said, ‘Trust but verify.’ You can trust what people say, but you have to verify it. If you have already started working with somebody, you’ve gone down the road and you’re building a relationship, and you’re asking questions, and you’re looking at properties to evaluate, that’s all well and fine, [but] there is a lot of good information that you can confirm.” — @MarcoSantarelli [0:38:23]
Links Mentioned in Today’s Episode:
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