How A Turnkey Deal Happened - Fernando Angelucci, The Storage Stud

https://u109893.h.reiblackbook.com/generic11/the-storage-stud/how-a-turnkey-deal-happened/

In this video, Fernando will show you how to make a Turnkey Deal.

A turnkey provider is someone that would buy a property, rehab it, and then they will put a tenant and property management in place and then sell it to what they call “armchair investors.”

These armchair investors or turnkey buyers typically live in very high-cost real estate markets.

In this video, Fernando will tell a story about a turnkey provider that was looking at the property. They almost closed the deal but then they realized they couldn’t turn the property into a four-bedroom model; it can only become a three-bedroom model.

If you want to know more about the details and what happened to this deal, continue watching this video.

Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,

Find out more at

https://www.TheStorageStud.com

https://titanwealthgroup.com/

Listen to our Podcast:

https://thestoragestud.podbean.com/e/how-a-turnkey-deal-happened-fernando-angelucci-the-storage-stud/

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Showing how we can do partnerships. Let's talk about a, what we call a co-host sale deal. There was a wholesaler that had a property. They I'm sorry, it wasn't a wholesaler. It was a turnkey provider. So, a turnkey provider is someone that will buy a property rehab it. They will put a tenant in place, put a property management company in place and then sell it to what we call armchair investors or a turnkey buyer. So, these turnkey buyers or the armchair investors, typically they don't live in this area. Typically, they live in very high cost real estate markets like California or New York or Germany or Israel or South Africa areas where the return on investment are much lower than what you'll find in the Midwest. And specifically in the Chicago land area, they were looking at this turnkey provider was looking at the property and they were going to close on it.

But then they realized that they couldn't, for their model. They couldn't turn the property into a four bedroom property. They could only make it a three bedroom property. So, the numbers on this one is it's in Homewood, Illinois. It's under contract for 65,000 and it's a three bedroom, one bathroom at about a thousand square feet. So pretty small property to try to squeeze a fourth bedroom out of it didn't work. So my buddy, Jeff, who was a turnkey provider and his partner, Joe, they gave me a call and they said, Hey, Fernando, we got this property under contract. After our inspector took a look at, after our contractors took a look at it, they were unable to find a way to make it work, to turn this into a four bedroom, which is required for our turnkey program. So, we think we got it at a good deal.

Wondering if you can sell it, let us know. I said, that's no problem. Send me all the information. And what we'll do is whatever I'm able to wholesale it for. I'll give you 50% of that wholesale fee after all costs. So, ended up sending it out to our investor list at about $78,000. Estimated after rehab value can be around 185,000. And again, this is one of those properties. This is just, it's an old property it's really outdated. And there's just a few things that look kind of weird about it. So, what we needed to do on this one were a new kitchen, a new bathroom, cosmetic rehab throughout the house. You know, there's an option to finish the basement or add another bathroom either in the basement or by actually blowing out the roof, putting on dormers to get more square footage on the second floor.

And that would help increase the ARV even higher. The nice thing about this property was it's in Homewood, Illinois, which has a fantastic school district. So it's just much easier to move properties, much easier to get them rented in these types of areas because the high school, Homewood Philosophy High School it's rated nine out of 10 on greatschools.org The elementary school, Western Avenue Elementary School also rated nine out of 10 on greatschools.org So, really appealing property on the back end, as long as you can get through the rehab. So again, it required a, very sophisticated seller that could take, sorry, sophisticated buyer or rehabber that could take down properties, have their numbers dialed into a point where they can take lower margins and still come out with a pretty solid profit. So, this was not a good deal for a first time fix and flip investor.

So, what ended up happening was the, my friend, Chris, who closed on our South Highland house, he ended up calling me about this when he said, Hey, I can take this one down. You know, I could pay 86,000 for it. I can close in two weeks. I said, all right, you're making it too easy for me. Here's where to send the earnest money. He wired the earnest money over in 24 hours and we ended up selling it for 86,000. So closing is going to be in about two or one, one to two weeks here. I think we're aiming for the 28th on that one. And so, at the end of the day half of that assignment fee is going to go to my buddies, Jeff and Joe, just for locking up the contract at a good price, and then, giving me a call and tapping me in to, you know, basically bring the deal to the C. So, those are some pretty cool deals that we've worked on in the last two, three weeks. Super excited to update you guys on how our fix and flip deal in Schomburg is going. We're going to continue to take photos before and after photos. And we'll update you guys with what those are looking like. So, stay tuned.