949-392-1999
SHOW NOTES FOR EPISODE 037 WITH MARCO SANTARELLI – TURN-KEY REAL ESTATE INVESTING
This podcast interview features real estate investor and turn-key provider Marco Santarelli. Marco is the founder of Norada Real Estate Investments and a major advocate for turn-key investing. In this episode, Marco discusses turn-key investing and shares his personal story of how he began investing at age 18 and became one of the pioneers of turn-key investing as we know it today.
What You Will Learn
- You are never to young or too old to start real estate investing
- Is there a benefit to having your real estate license
- How he was in the right place at the right time to introduce turn-key investing to a growing audience of investors
- The difference between “rent-ready” and “turn-key”
- The best cities to purchase rental properties
- His definition of “turn-key”
- The biggest problem in turn-key
About Our Guest
Marco Santarelli
Marco Santarelli is an investor, author and the founder of Norada Real Estate Investments — a nationwide provider of turnkey cash-flow rental properties. He purchased his first real estate investment at the age of 18 and successfully handled the entire rehab and property management of that property without ever taking a course or reading a book on the subject. Marco went on to get his real estate license and sell residential real estate for three years before pursuing other active business ventures. He eventually returned to real estate investing and founded Norada Real Estate Investments in 2003. Since then, Marco’s organization has helped over 1,000 real estate investors create wealth and cash-flow through real estate investing. He’s also the host of the Passive Real Estate Investing podcast.
More About Marco
- Didn’t come from wealthy family
- Growing up saw people with wealth because of real estate
- Turned 18 and jumped in – purchased townhome in Calgary, Alberta (major oil area of Canada) – $40-60,000 range, gutted it/rehabbed, put it up for lease and started taking applications
- Got real estate license but didn’t enjoy open houses and driving people around to see properties all day
- Became co-founder of dot com but bubble burst
- Real estate took off
- In 2003, got email from Robert Allen (Nothing Down) to attend seminar. Attended and was amazed at how many people attended and what they paid
- Still actively invests (various asset classes)
His “Lightbulb” Moment
- Was going to Robert Allen boot camps
- 2004-2005 – had acquired 82-84 units (single family, various plexes, 19 unit, 40 unit) Living in California and invested in GA, FL & MI
- People in boot camps were asking him where did you find properties, how did you negotiate, how did you do your analysis? Can you find me some?
- That’s when he started his turn-key business – built though phone and online
- Built local teams (local realtors, property managers, contractors, inspectors)
Rent-Ready vs. Turn-Key
- Many people are confused on the definitions
- Turn-Key Properties
- In right market
- Newly renovated
- Right neighborhood
- Right management team
His Markets
- US has over 400-500 metropolitan areas
- He has picked 6-11 markets with the following characteristics
- Numbers must make sense
- Economies must make sense
- Fundamentals
- Housing Market
- Affordability
- Job growth
- Rent-to-value ratio (gross monthly rent divided by the purchase price) — .9-1.1% is good
- His markets
- Kansas City, MO
- Indianapolis, IN
- Birmingham
- Birmingham, AL
- Atlanta, GA
- Memphis, TN
- Jacksonville, FL
- Dallas, TX
- Houston, TX
- San Antonio, TX
- Chicago (outside of Cook County)
- Linear (4-7% appreciation – more consistent, steady growth) vs. Cyclical markets (coastal, double-digit appreciation up and down – more of a gamble)
- Types
- SFRs through triplexes
Definition of Turn-Key
- Investment property in a good market that has
- Growth
- Jobs
- Increasing population
- Neighborhood
- B or C Class Property
- Property is new or newly renovated
- Has qualified tenant in place
- Under professional property management
- Generally, relationship with buyer ends after the sale however they are available if issues with property management occur
- His company also has all the local contacts (title companies, lenders, inspectors, tax advisors, asset protection attorneys). Can give buyers 2-3 referrals in each category
Biggest Problems with Turn-Key
- Starting a relationship with a turn-key company when they know communication is not good
- Good communication is key
What he does differently?
- Insists theat buyer hires an inspector before each purchase
- Provides references to other clients
A Success Story
- Had client that purchased a duplex with one of Marco’s suppliers
- Supplier had started to cut corners and were not doing the rehabs and repairs they were supposed to before the sale
- He fired supplier
- Gave client $17,000 to fix the problems and got two new clients
Advice for Old Dawg’s looking to get involved with Turn-Key Properties
- Education yourself (podcasts, books, forums)
- His favorite investment is real estate because:
- Can hold its value
- Can generate income
- Can provide tax benefits
- Tenant pays your mortgage
- Can be leveraged to buy other properties
- You are preserving your capital in an inflation-hedged investment and can earn 8-10% and more on your investment
- Properties at his company run between $80-100,000 – could pay cash or 20%
Rap-It-Up
- Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki and The Millionaire Real Estate Investor by Gary Keller
- Favorite business book: The E-Myth by Michael E. Gerber
- Most valuable website for real estate success: Zillow.com, neighborhoodscout.com
- Favorite App: E-mail
- If you lost everything…and only had $1,000: Spend it on education and/or mentorship
How can people contact Marco
- Company website: noradarealestate.com
- Podcast website: passiverealestateinvesting.com
Until our next podcast, keep moving forward and God bless!
IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher or GooglePlay and Subscribe, Rate & Review our podcast. This will greatly help in sharing this podcast with others seeking to learn real estate investing as a means to achieve a successful retirement.
Check out our other podcasts at olddawgsreinetwork.com.
Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com.
Episode Sponsor: Meno Studio – menostudio777@gmail.com
