Epic Real Estate Investing - Why are Your Properties Cheaper than Your Competition? | 3rd Degree Thursday

Episode Date: August 14, 2014

A turnkey investment real estate provider makes the perfect solution for busy professionals.  A turnkey provider will locate the property, rehab it to a livable condition, screen and place a tenant, coordinate property management, and then sell the property as a cash flowing asset.  So how do they work and why do some charge more than others? Today, Matt is sharing his business model and explains why the properties at Cash Flow Savvy are so much cheaper than the competition.  Enjoy!   I’ve been researching turnkey providers for the last 6 months and I’m curious – why are your properties at Cash Flow Savvy are so much cheaper than most of your competition?   -         Laura in Jacksonville, OR - -------------------------------------   CashFlowSavvy.com   The free course is getting a facelift and the new version will be released soon!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678.   What interests you most? -         E ducation -         P roperties -         I ncome   -         C oaching   - Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello and welcome to third-degree Thursdays, this show where I subject myself to you giving me the third degree. So today's question comes via email from Laura in Jacksonville, Oregon. And Laura asks, I've been researching turnkey providers for the last six months, and I'm curious as to why your properties at Cashflow Savvy are so much cheaper than most of your competition. Ah, thanks, Laura. I appreciate that for asking a question that gives me the opportunity to brag about my company. Seriously, turnkey providers are a great solution for busy professionals. And if you find the right turnkey provider, and there are many of them out there. And for my experience, most of them

are good. I've caught wind of a handful of shady operations, but for the most part, most seem to have good reputations. And I don't know them all intimately. I just know what I heard. And I know that word travels around pretty quickly in this industry. And if people are consistently doing people, wrong, people will talk, and those companies will eventually won't be able to handle that type of weight. They will fold if they're consistently doing people, not doing people right. Okay, so anyway, a great solution for busy professionals. A turnkey provider locates a property. They rehab it to a livable condition.

They find a tenant. They coordinate the property management. And then they sell it as a package, as a cash flowing asset, all complete. That's why they call it turnkey. You just put the key in, you turn it, and it's done. So that's the typical model. Now, for a turnkey operation to function in that manner, it takes some serious capital. They have to market for the property.

They have to buy the property. They have to rehab the property. They have to find the tenant and they have to manage the property and they have to do all of that and pay for all of that and continue to maintain the property until they find a buyer for that particular property. And they've got to pay the people, the staff to do all of that. So there's acquisition costs, there's payroll, there's rehab costs, and what's called holding costs, of which sometimes if the property doesn't sell right away, these holding costs, they can add up. And the staff to maintain and manage that property, that payroll adds up.

And not to mention all of this ties up the company's funds, because all the funds are tied up into the property. They're tied up into the rehab. They're tied up into the staff. And all that's preventing them from picking up more properties to rehab and sell, which translates into opportunities. costs. And because of all of those upfront costs, the turnkey operation in order to keep the lights on and turn a profit, it has no choice

but to build those costs into the purchase price of the property. And those costs, they get passed on to the client. When they buy the property, all those costs are built into the profit of the property, of which there's not as much profit as a lot of people, most people think. But those costs

are have to be passed on to the customer, the client. Okay? So, you know, though when you do think about it, it's still probably worth the extra expense to the client, considering the client probably just they wouldn't have the time to go do it. That's probably what attracted to the service in the first place. They wouldn't have the contacts. They wouldn't have the resources and probably wouldn't even have the know-how to do all

of that themselves and take the time off of work to go do it. You know, at the end of the day, it's a fair trade. Okay. And having said all that, the client owns the property and gets to experience all the benefits of owning real estate far into the future, decades beyond when the purchase of the property was made. So to answer your question, Laura, the reason our properties are so much cheaper than our competition has to do with our business model. You see, we do things a little bit differently. We do all of the work after we sell the property. See, our clients, they get to pick out their property first, so that once they pick it out, they buy it.

And then we do the work. And we don't have the upfront cost of acquisition. We don't have the upfront cost of rehab or the management or the maintenance. So we get to pass that savings onto our clients. That's why our properties are less expensive. And just to make sure that our incentive is in the right place and we're aligned together, we guarantee to pay our clients rent 30 days from the close of escrow, whether we are finished with the work or not, whether we have a tenant or not.

So we guarantee that and we write checks all the time. Typically takes us about six weeks. So we always, most of the time we're writing that first check. So that person is always cash flowing 30 days from the close of escrow. But that's why our properties are less expensive is because we do all of that work and pay for all of that after we sell the property. Okay, it just seemed we kind of did it that way out of necessity. And it just turned into be a really great business model and it puts us and the client on the same side. So I hope that satisfactorily answers your question.

And I hope that when you're picking a turnkey provider, Laura, you'd give Fernando and Mercedes over at cashflow savvy.com a chance to earn your business. And that goes out to all of my busy professionals listening. Should this type of real estate solution make sense for you and your situation, give Fernando and Mercedes at cashflow savvy.com a shot. You can just go to cashflow savvy.com and download their free investor package, of which includes a free report on the top 10 cash flow markets in the country right now. now. We just updated it. It's totally current. So you can get that for free by downloading

the investor package. It's attached. It's all together. And it's absolutely free. Cashflow savvy com. All righty. Thanks for your question, Laura. I have a bunch of questions that came in after last week's inaugural episode of third degree Thursday. And I will get to all of them eventually. Thank you for the questions. Thank you for the ideas. And we've got a lot of these episodes coming up. And so should you have a question, comment or concern that you'd like me to answer here live on the show, send it to me at Matt at epic real estate.com and type third degree in the subject line or leave me a voicemail on the epic hotline at 1-88-891-7203. And I'll actually even play your voice here live on the air and I'll make you famous. All righty. So I'll see you

tomorrow for a new episode of Financial Freedom Friday. is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.