Quotations by Brandon Turner

95% of the units I've purchased have been foreclosures that belonged to landlords who failed and lost their properties to the bank. [2015] - Brandon Turner

House flipping and real estate wholesaling are "jobs." Owning rentals is an investment (hopefully!) [2015] - Brandon Turner

If you are looking to grow your net worth exponentially, consider keeping your job or finding another way to make income. Your business should bring in at least 3X of your current job before thinking of quitting your job. 1X for tax, 1X to survive, and 1X for reinvestment and unexpected events. [2015] - Brandon Turner

How to Make $1,000,000 Through Rental Properties: Buy incredible rental properties, save the cash flow, and reinvest that cash flow into even more properties. This is not a get-rich-quick plan. It plays out over seven to ten years--maybe more, maybe less. This plan works based on ideal numbers. For example, I use a nice, round "3% appreciation" number, because that has been the U.S. historical average. [2015] - Brandon Turner

Buying Standard Example: 1. Multifamily property. 2. Cash flows of $200 per unit, per month after all expenses have been paid. 3. Property must be purchasable for a discount (at 80% of what it's normally worth). 4. Property's value must be capable of being improved by 10% during the first year through "forced appreciation" (such as a paint job and landscaping). 5. Property must appreciate at 3% per year after year one. [2015] - Brandon Turner

House hacking is the idea of combining your investment property with your personal residence. The phrase is more often used to describe the practice of buying a small multifamily property (a duplex, triplex, or fourplex), living in one unit, and renting the other units out. When you plan to live in a property for at least one year, financing becomes much more friendly for the borrower. [2015] - Brandon Turner

BRRRR stands for Buy, Rehab, Rent, Refinance and Repeat. It's the strategy that involves buying fixer-upper rental properties, repairing them, renting them out to great tenants, refinancing them to get your money back, and then repeating the process. This can be a powerful strategy because it allows you to acquire numerous properties without running our of capital to invest. [2015] - Brandon Turner

The 70% rule states that the most a flipper should pay for a property is 70% of the after repair value (ARV, what the house is worth after it has been fixed up) less rehab costs. So, a house that has an ARV of $150,000 and needs $30,000 worth of rehab could be bought for $75,000, because $150,000 x .7 = $105,000 and $105,000 - $30,000 = $75,000. How can I do this? It may require direct mail, Craigslist, driving for dollars and it's going to take some hustle. Most lenders are unwilling to loan money on a fixer-upper and you'll probably have to look at options such as hard money, private money, cash, home equity, and other strategies. [2015] - Brandon Turner

I found one of the best handymen I have after we placed a free ad on Craigslist asking for local handymen who could do occasional tasks for our real estate investment company. We received several responses, hired each to do a small task, and quickly found a great guy we now use often for small tasks. [2015] - Brandon Turner

When you invest in real estate, it's not a matter of "if" you get sued but "when." A good lawyer will help make sure your lease and other forms are legally binding, as well as guide you on (and prepare) the best legal entity for holding your properties. Having an attorney who either invests in real estate themselves or specializes in this kind of work is best. Attorney rates typically start at $200 per hour and can climb as high as $600 an hour, depending on experience and what they are doing for you. You will not likely be using your attorney for dozens of hours of work--usually just 15 minutes here, 30 minutes there, and so on. [2015] - Brandon Turner

I recommend finding an insurance broker, rather than just an agent at a specific company. A broker can shop around at different companies for the best rate and coverage, and can switch your policy if necessary without your having to take your business elsewhere. [2015] - Brandon Turner

Most commonly, a property manager will do the following: Advertise vacancies; Take phone calls from potential tenants; Show units to prospects; Hand out and accept applications; Screen tenants for rental, career, and criminal history; Choose a tenant and sign a lease; Accept maintenance phone calls and schedule needed appointments; Prepare monthly reports concerning the property; Supply the owner with a year-end summary; Manage problems as they arise; Stay in constant communication with the owner about problems; Pay property bills (sometimes, depending on the manager and the bill) [2015] - Brandon Turner

Property management fees differ depending on the size of the property and its location, usually ranging between 8% and 12% of the monthly rent, with 10% being the most common for single-family and small multifamily properties. Also, management companies have a "placement" fee that is typically equal to one-half of the first month's rent (or even the entire first month's rent) upon a lease signing. Some management companies also charge a "renewal fee" each year when the tenant renews their lease, but this is not as common. [2015] - Brandon Turner

A good property manager can be a great source of leads for your next property. They can also help you better understand the market, such as vacancy rates or current market rent. [2015] - Brandon Turner

The 50% Rule: A rental property's expenses tend to be about 50% of the income, not including the mortgage principal and interest (P&I) payment. The formula looks like this: Cash Flow = (Total Income x .5) - Mortgage P&I [2015] - Brandon Turner

"Meeting the 2% rule (the 2% test)" means that a property's monthly rental income must equal 2% of the purchase price or greater. The value 2% could easily be replaced with another number to test that as well. For example, many people look for "the 1% rule (test)." You might hear people talk about the .5% rule (test), the 1.5% rule (test), the 3% rule (test). In my local real estate market, I know that if I can find a property that gets close to 2%, it's probably going to cash flow well. Yours might be different. Maybe you'll discover that 1% is plenty to get you enough cash flow to create a solid return on investment. [2015] - Brandon Turner

The purchase closing costs are all the costs associated with the purchase transaction. Included might be loan points, loan origination fees, prepaid insurance, prepaid property taxes, title and escrow fees, recording fees, attorney charges, and other fees custom to your area. In my experience, these purchase closing costs usually average around $1,500 for a $100,000 property, plus any fees added by your lender. [2015] - Brandon Turner

If the math doesn't' seem to work on a certain type of investment in your area, perhaps it's time to consider what is working. Would wholesaling commercial properties be a better use of your time? What about multifamily properties? How about condo conversions? What about fast food triple-net leases? Have you considered subsidized low-income housing? To find what is working in your town, simply connect with investors who are actively engaged in your market. What are they investing in? How are they making a profit? Discover the secret to their success, and you'll find the path to yours. [2015] - Brandon Turner

Location is still key in any real estate investment. I'm referring to the middle-class neighborhoods on the outskirts and in the suburbs. Generally these areas are found 20 to 40 miles outside the city center, in smaller towns and communities. [2015] - Brandon Turner

Turnkey investing is a loosely defined investment strategy in which the investor buys, rehabs, and has a property managed through a third party, usually from a long distance away. All you need to do is "turn the key". There are hundreds of turnkey providers in America (and across the world), and no two companies are exactly alike. Some will buy, rehab, rent and then sell a property to you. Others will simply help you find the property and let you do most of the heavy lifting on the rehab side, then manage the property for you. Many people who live on the East or West Coast of the United States, as well as many who live outside the country, rely on turnkey companies (usually in the Midwest, where cash flow tends to be higher) to invest in great markets. [2015] - Brandon Turner