INTRODUCTION

THE TURNKEY REVOLUTION BEGINS

It was a Thursday night in the fall of 2003, and Kent Clothier Sr. had just finished speaking at the monthly meeting of the Memphis Investors Group at the Home Builders Association building. It was a typical real estate investing group that met monthly, and they were constantly looking for speakers to share insights, stories, tips, and sometimes sell DIY programs.

He was invited to speak by the group for one reason. He was an action taker. He wasn’t interested in hanging out for doughnuts and coffee at the monthly meetings. In fact, a favorite saying of his in business was that “he didn’t have time for the doughnut eaters.” He was interested in meeting who he needed to meet, learning what he needed to learn, and getting down to business.

It was a normal talk for him and an uneventful evening that was about to get turned upside down. After the meeting, he was approached by a small group of listeners who wanted to pick his brain on how they too could get started. Only this group had a very specific question. They were airline pilots at Federal Express there in Memphis and found themselves without knowledge and barely enough time to invest in real estate. What they did have was the means and desire to invest in real estate and a pretty good idea that owning long-term rental properties passively was a good way to grow the money they had and build additional income.

The question they had for him was, Would he help them build their portfolios? Would he help find properties for them, use his renovation connections and crews to fix the properties, and then hand them off to his property management team?

Kent Sr. spent the next few minutes asking them what they were looking for and exactly what they expected. He explained that he would want to make an income for putting in his time and expertise. He expected to make a profit for doing the work. They all agreed that they expected him to make a profit. After all, they said, “why would we want to go into business with someone who didn’t want to make a profit?” They left the meeting that night agreeing to meet later in the week.

A few days later, on the back of a restaurant napkin, Kent Sr. laid out the blueprint for a new company. The blueprint for a company that would excel at finding great investment properties, renovating them to a high standard so they were in demand, and providing a new style of property management. A style focused on attracting and satisfying the needs of residents. A customer service company that would happen to be in the real estate investing business.

A restaurant napkin isn’t quite big enough to hold a lot of details. But it was big enough to hold a revolutionary idea. Kent Clothier Sr. happens to be my dad, and he happened to be laying out the details of what would become The Turnkey Revolution.

A FOOT IN THE DOOR

Everyone is interested in real estate.

Our culture loves the idea of real estate investing. We devour stories about people who went from rags to riches flipping houses. We watch episode after episode of renovation reality shows on TV: a quick half hour from wreck to rental property. Real estate investing is glamorous. Real estate investing is easy to talk about. But it’s more complicated than it looks.

The deeper you go into real estate, the uglier it seems to get behind the scenes. Horror stories start to come out of the woodwork. You don’t know what you don’t know, and what you don’t know loses you money. The reality of investing in real estate has little to do with the “reality” we see during the 30-minute snippets.

Even if you can afford to invest in real estate education, you still get blindsided by surprises. No amount of education or online message boards can educate an investor to what it is really like when you pull the trigger and actually own an investment property.

When you bring the rest of life into the picture, things get even more complex. You’re not just investing in real estate for the heck of it. You have dreams you’re working to fulfill. Maybe you’re trying to save for your wedding or your kid’s college education. Maybe you want to fund a comfortable retirement and leave a legacy for your family.

Often the investment dollars we use come from the money we’ve put aside to fulfil the dreams we have for our families. It may not be life or death, but it can sure feel like it when we put everything we have on the table. So, no, you are not just investing in real estate, you are investing in your very future.

Whatever the case, you see that real estate is the right vehicle to take you to your goals. But if you get it wrong, you stand to lose more than just money. You’re holding your future in your hands, and that’s intimidating—even overwhelming. At the same time, you hear stories over and over again about people who played the real estate game and won. You’re frustrated, because that should be you. Instead, you’re sitting on the sidelines with no idea where to start.

You know that real estate itself is a solid, sound investment, and you have a strong desire to get involved. But what you don’t have is the knowledge to do it safely or the time to manage a nest of chaotic rental properties. You desire a better way forward—a better way forward in life. Yet life seems to be the one thing getting in the way. With all of the hustle and bustle of working, maybe raising a family or starting a new chapter in life, time and knowledge seem to be the hardest hurdles to overcome. You have the desire, but you need something more.

You need a way to get your foot in the door.

THE WAY IN

What if I told you that you could safely, passively invest in real estate without giving up your current job, and without spending thousands of dollars and hours on education? What if I told you that not only could you invest in real estate, but you could passively own the properties themselves. You wouldn’t have to invest in pieces of properties or shares with a bunch of other real estate investors you don’t even know. You could invest in real investment property and own the deed yourself.

That opportunity exists. It is absolutely real. You can invest in real estate in a hands-off way with a team of experts in your corner—service-oriented people who will handle the dirty work for you and help you achieve your goals. There’s a name for this method of passive investing.

It’s called turnkey real estate investing.

When done correctly, turnkey real estate shortens the learning curve and allows you to successfully invest in the real estate market using the resources and knowledge that you already have. Instead of waiting, learning, and losing thousands of dollars on mistakes, it gives you the chance to invest safely, right now. And when you take advantage of it, it brings your goals within reach.

With turnkey in your corner, you can have that extra $2,500 a month in disposable income that you need to retire comfortably. You can afford your daughter’s wedding. You can buy a piece of real estate and have it paid off by the time your children are ready to go to college; that house is their college education fund.

That kind of money may not be enough for you to retire on, but it can make a huge difference in how you retire. It can open up a world of choices for you on where you retire, how you retire, and when you retire. It can make a huge difference in the choices your children have when they are older. The generational impact a small portfolio generating a few thousand dollars a month can have is enormous.

Most of the time, it doesn’t take millions of dollars to achieve your dreams. The reality is that you just need a little bit more. You need to take what you have and make it go a little further, and you need to do it safely.

Turnkey real estate is a way to make that happen.

MY ROAD TO REAL ESTATE

I’ve been investing in turnkey real estate since 2003, when I bought my first property by accident.

My wife, Michelle, and I had just moved to Colorado from Tennessee with our 11-month-old son, Grayson. Before we could buy a home of our own in Colorado, we had to wait for our house in Tennessee to sell—or so I thought at the time.

The Tennessee house spent a year on the market.

All those months, the three of us lived in a 300-square-foot hotel room. I had moved my family across the country for an opportunity that would eventually culminate in founding my first company. Little did I know that my home in Tennessee was going to sit on the market for over a year. So, what had started out as a little adventure living temporarily in a hotel room turned into a long-term adventure in creative usage of space. Very little space!

Living in a hotel for a year was as good as it could be: we got to know the maids really well, and they were wonderful to our family. But it was still a hotel. We never had any peace and quiet. We had to eat out all the time, which got old after about a week. The dryer at the laundromat left burn marks on our clothes. Everything you can imagine about the annoyances of hotel living we experienced. About the time our son started thinking every house had a fountain Coke machine and daily breakfast buffet, I decided I had to get us out of the hotel and into a home in Colorado.

I just didn’t know how to do it.

As luck would have it, Michelle had a younger sister who lived back in Tennessee, and she needed Michelle’s help for a couple of weeks with her new baby. While they were back in Tennessee helping, my late-night TV habits were about to pay off.

If you watch enough cable TV, you will eventually come across a late-night infomercial hawking a “how-to” for real estate investors. One of the mainstays on TV from the first decade of the twenty-first century was a man named Carleton Sheets. Late one night while Michelle and Gray were gone, I saw a Carleton Sheets infomercial on TV.

“Real estate investing has created more millionaires than any investment in history,” it said. “You can get started today, in your spare time, with no prior experience. You don’t need to quit your full-time job. Call the number on your screen right now!”

Under other circumstances, I probably wouldn’t have given it a second thought. We all have this idea that only certain people buy things off the TV late at night, and I knew that the Carleton Sheets program wasn’t going to be a miracle solution. But I did see it for what it was: a creative and inexpensive opportunity to move forward. What did I have to lose? I remember thinking that I was sitting on the edge of a bed in the middle of a hotel room without a clue about how I was going to get out. What did I have to lose?

I bought that program for four easy payments of $37.99, and it really did spark new ideas in me about what was possible. Hey, selling the Tennessee house isn’t my only option, I realized. I can trade houses with someone whose property is worth less and create the atmosphere for me to buy the house I need here in Colorado, right now.

And that’s exactly what I did. I found a couple who wanted to buy my Tennessee house but were having trouble selling their own smaller place two blocks from Rhodes College in the heart of Memphis. My property sat on land and was a long commute from the city. Their property was a perfect college house. Their property was half the price of mine, and if I could figure out a creative way to swing a deal, I might be able to qualify to buy two houses: one in Memphis as a rental and one in Colorado as my primary residence. I hadn’t had a chance to read or listen to half of the Carleton Sheets program, but the half I listened to sparked an idea, and my Realtor thought I was nuts.

HOUSE SWAP

I called my Realtor on the phone and asked her to send me over the listing on their property. I wanted her to go take a look at the property, and she thought I was wanting to give them advice on what they needed to do to sell their property. I explained to her that if their property was in a good location and could get a strong rent, I thought I would offer to buy their property and free them up to buy mine. I thought we could swap houses!

She wasn’t the only one who thought I was crazy. The other couple thought I was completely off my rocker, and Michelle had no idea what I was talking about. I called my mortgage broker and asked if I could qualify to buy two houses if my property in Memphis was a cash-flowing rental property. He ran the figures and gave me the green light.

I was able to purchase their property and free them up to purchase my property. I then rented the Rhodes College house out to students, hiring a friend I trusted to handle both the renovation and the property management for me. It may not have been the most ideal situation to get started as a real estate investor, but it got me in the game.

Finally, we were able to move out of the hotel—and suddenly, I was also a real estate investor. My son was just starting to get used to the daily maid service and the pool, but Michelle and I were ready to move on. Not only was control of the present back in my hands, but control of the future was, too. That first property was valued at $120,000 at the time, and it represented more than just an investment property to me. “That rental property is Grayson’s college fund,” I told my wife. “By the time he’s 18, we will own it free and clear, and it will pay for his education.”

That little house in Memphis was my first turnkey property. It is where I started my rise as a real estate investor and my drive to help other investors. I had a long way to go and a lot to learn, but I knew at that moment I was moving in a different direction.

The day before I was trying to figure out my next moves. Was I staying in Denver, or was I moving back to Tennessee and starting my business there? Now, I was firmly planting my feet in Denver and starting to build my business with a new attitude toward my future. Real estate investing had suddenly become a major part of my strategy . . . and it was only the beginning.

TURNKEY LEADERSHIP

I don’t just talk about turnkey real estate. My family and I have years of experience investing in all kinds of real estate ventures. I watched my dad buy investment properties in the 1980s. My older brother owned several properties in the late 1990s. I even rented one of his places while I was in college at the University of Memphis. When I started out in turnkey, owning real estate was nothing new to me. What was new to me was owning an investment property halfway across the country!

As a real estate investor, I’ve seen great success, and I’ve been crushed from making bad decisions—mistakes that became invaluable knowledge. I want to be clear right here at the beginning, I have made miserably poor decisions as an investor and made nearly every mistake a passive real estate investor can make. I also made some excellent investment decisions and learned from my mistakes. Over time, I realized that I could use my experience to help others. I could prevent them from making the same bad decisions I had made, so that they could invest safely in turnkey real estate the first time.

In 2003, my father founded, arguably, the most respected turnkey investment company in the country: Memphis Invest (MemphisInvest.com). In 2007, my younger brother, who had just graduated from the University of Mississippi with a degree in real estate, joined my father to grow and expand the company. They began growing the company by hiring young, energetic, and eager team members who had very little knowledge or experience in real estate, but a strong desire to learn. They started building a turnkey powerhouse before real estate investors knew what it truly meant to invest in turnkey properties. One year later, I joined the company as a partner as the head of sales and marketing and set out to change that.

As of 2018, our company has branches in Memphis, Dallas, Houston, Oklahoma City, and Little Rock. We have over 4,800 properties under management valued at over $600 million, and our investors bring in over $40 million per year in rental income.

Memphis Invest was named small business of the year by the Memphis Business Journal in 2013. We’ve been one of the fastest-growing companies on the Inc. magazine list of the 500/5000 fastest growing private companies since 2012. In 2017, we placed four companies on the Inc. magazine list. Our business has been featured in several national publications, including the New York Times, the Wall Street Journal, USA Today, and Money magazine.

The investors who work with us stay with us. Less than 1 percent of the real estate investors who have chosen to invest with Memphis Invest have left to go elsewhere over the history of our company. Our clients understand what’s happening with their investments at all times. They have a strong relationship with their turnkey partner, and that gives them the confidence to keep moving forward in the direction of their dreams.

You’re next.

THE COURAGE TO TAKE ACTION

This book can and should be more than your foundation for turnkey real estate investing. It should also be your validation that you’re covering all your bases. Read it cover to cover, but don’t stop there. Highlight the specific, actionable items you can do to be successful as a passive real estate investor. Then refer back to them as you grow your portfolio, and ask yourself, “Am I taking the right steps here?”

Real estate is like any other kind of investment: it comes with a certain level of risk. But when you follow the guidelines I’m about to share with you, you can minimize those risks and move forward toward the life you want for yourself and the people you love.

Investing in turnkey takes diligence, and even more than that, it takes courage. When I bought my first turnkey property in Tennessee, I knew that the way I did it wasn’t perfect. But the important thing was that I went from somebody thinking about investing in real estate to somebody who was actually doing it.

Unlike the doughnut eaters my dad had always railed against, I was taking action. I was moving forward instead of standing around and waiting. I had the courage to act, and it gave me and my family a future we didn’t have before.

You have to be bold, be brave, and take the necessary risks to achieve your dreams. That does not mean you need to be risky. There is a big difference between taking risk and being risky. That is where this book comes into the picture. I truly want to share my story and my experience in order to help guide you to making great investment decisions. This is your invitation to go from wishing and waiting to putting some serious momentum behind your drive to build a real estate portfolio.

The turnkey revolution is a simple guide—a road map offering the questions, answers, and tools necessary to build a reliable and productive passive portfolio. With stories culled from my own experiences and my conversations with real estate investors over the years, I will guide you step-by-step through the process of developing a smart, safe turnkey investment strategy. You will have the tools and the knowledge necessary to build your own passive portfolio. You will learn each of the steps to:

•  Design your vision. Your “why” that drives you to hit your investment goals.

•  Finance your turnkey portfolio. The ins and outs of smart turnkey financial decision making.

•  Research investment markets. Learn to pick the right cities based on the right metrics.

•  Choose your turnkey company. A bad company can ruin a great investment.

•  Create an investment plan. Design a plan that fulfills your specific vision.

•  Make your investment. Nothing happens until you take action!

•  Follow up with your investments. A passive investor is never passive about his or her investments.

•  Expand your vision. As your life grows, your vision should grow, too.

Throughout the book, I offer helpful tips and strategies successful turnkey investors have used to build their portfolios. Each chapter concludes with our Turnkey Safely Checklist^TM and what I call Turnkey Mastery Tips—questions you want to consider to help safely plan your journey and chart your progress along the way.

THE OPEN ROAD TO YOUR FUTURE

Investing in real estate isn’t a small decision. But when you do it right, it’s a smart one. Building the future of your dreams doesn’t all have to be hard work. It doesn’t all have to be about the daily grind. Some of it can be smart planning and strategic decision making. Turnkey investing is for those who want to take action today to create a more comfortable future and lasting legacy. This is what I call the turnkey revolution.

You can buy a house once every two years like clockwork, then look up one day in the future and see that you’re a millionaire. Not because you won the lottery, but because you made some really good, smart decisions, and you now own a million dollars’ worth of real estate.

I have had the pleasure of meeting and speaking with thousands of real estate investors across the country. There are no real secrets to being a successful real estate investor. It’s pretty simple, in fact. Some of the best real estate investors I know are doctors, librarians, schoolteachers, police officers, lawyers, bankers, executives, moms. They are the best investors I know because they took action. They didn’t wait for a better time, and they didn’t drown their dreams in the promise that someday they would get started. They took action, and to this day they continue to take simple steps—steps that give them strength by researching markets and choosing great turnkey partners. They don’t have deep, technical knowledge of real estate, but they have portfolios that give them something far more important. They have their freedom.

Anyone can invest in turnkey real estate. It’s not difficult, and it’s not the domain of the rich and famous. As long as you do certain things to protect yourself, you can invest literally anywhere in the world. The opportunity exists, and it has the power to open the door to the future you want.

When you safely and passively invest in real estate, the barriers in front of you disappear. The steps you need to take become clear and concrete. You’re not stuck on the sidelines anymore. Now, you’re on the open road that will take you where you want to go. Now, you’re a real estate investor.

Now, you’re part of the turnkey revolution.