The #1 Reason You Should Run Away From Turnkey Companies

by | BiggerPockets.com

I’m here today to talk to you about why you should run from pretty much every turnkey real estate company.

Experience has led me to believe that the majority of turnkey companies out there are putting a ton of pressure on the investors that reach out to them to buy a property. A lot of them have sales departments that have to follow a specific process. That’s something I understand, but a lot of them don’t care who you are, what you do, and what your current circumstances are. A lot of them don’t care about the current market conditions or where the turnkey properties are located.

I’ve even heard stories of folks responding to companies and saying something like, “My family member just passed away.” Maybe tan unforeseen circumstance has arisen and they’re not ready at that point. Still, these companies put pressure on the investor to buy. They say, “If you don’t buy, the market will go up tomorrow and you will miss out on a deal.”

Guys, I don’t like any of that mumbo jumbo. I don’t like pressure sales tactics, and I don’t like people not caring about the client’s wants, needs, and circumstances. No one is willing to listen to the investor, and they just want to promote their agenda and move on the next victim. I hate it.

Related: The 5 Most Frustrating Turnkey Rental Issues Investors Face

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Pressure From a Turnkey Company to Buy? Run the Other Way

I understand that investors need to be led down a certain path because ultimately they went to that turnkey provider for their product and for their service. They want to be educated, understand the process, and ultimately invest in turnkey real estate. But I’m confident that many of these investors don’t want to feel the pressure of purchasing a property. They want to be able to make a decision on their own time. It’s only right when it’s right for them.

So my two Australian cents to you is if anyone is putting pressure on you to make a decision, whether they are a turnkey provider or any other provider from a service or product standpoint, you should run away and never look back. I say that because when one door closes, another door opens. If you don’t a buy a property today, you’re going to buy one tomorrow. If you miss out on an opportunity today, you might invest in stocks tomorrow, you might buy crypto the next day, and you might invest in oil 10 years from now. There is always going to be an investment opportunity that you might stumble across and that fits your needs and risk level better. So please do not succumb to any pressure. Make decisions on your on time when it feels right for you based on your circumstances and the market conditions. I think it’s very important.

That’s it. Am I right? Am I wrong? What are your thoughts on this?

Please comment below. I’d love to hear from you.

About Author

Engelo Rumora

Engelo Rumora, a.k.a.”the Real Estate Dingo,” quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.

10 Comments

  1. Christopher Smith

    I’ve explored a couple of turkey outfits. I had no evidence that they were in any way unscrupulous, however I just didn’t find their inventory very attractive to me.

    Generally the properties being sold were not very attractive from a pricing standpoint, were much older than the ones I have bought for myself, and were in what I would label as potentially substandard neighborhoods.

    The various fees were also quite high and the property managers and contractors all represented big unknowns to me. With all of these issues, I ultimately decided that well managed publicly traded REITs represent a much more attractive alternative to me at this point in the real estate cycle.

    • Engelo Rumora

      Thanks for your comment Chris.

      I never was a fan of REIT’s but then again, I never really dived into them.

      What are some of the returns that you are seeing?

      Thanks.

      ps. Buying a true turnkey property through a “true” turnkey provider should eliminate having to deal with any 3rd contractors or property managers as it would all be handled in-house.

      Just saying 🙂

  2. Annette Behunin

    We’ve purchased two properties through Turnkey companies. It has been a good experience as we were new to the rental world. There was not a lot of pressure, however, the real challenge from my perspective is the apparent lack of opportunity to negotiate on the price. That may just be the market, but it seems to me more about the fact there are so many people jumping on this bandwagon that the properties are gone before you’ve had the opportunity to do your due diligence. We bought in slow growth markets so we knew this was a longer term game. So my advice is, take your time, ask a lot of questions and make sure it’s the right deal before you go with a turnkey investment.

    • Engelo Rumora

      Thanks for your comment Annette and great advice.

      I think it’s very important that folks take their time and don’t jump into something that they will regret later.

      If you miss out, there will always be another deal around the corner.

      Never “cry” over a missed opportunity because they are truly are endless 🙂

      Ohhh and yes. Turnkey companies don’t negotiate because they can’t.

      Most of the time their profit margin is already calculated into the asking price so they have no “wiggle room”.

      Thanks again and much success

  3. Patrick Owens

    Thank you for the informative article. I have been interested in turn-key properties as a way to ease into the buy and hold rental market. But, I have seen the reports to the BBB for Clayton Morris which scare me. I also have seen Memphis Turnkey Investments here on Bigger Pockets.
    So, now I have mixed feelings

    • Engelo Rumora

      Thanks for your comment Patrick.

      Don’t let what you see influence what YOU want to do.

      Spend the time in conducting your own due diligence and establishing your own opinion before making a decision.

      There will be mixed reviews for everything but overall “yes”. Turnkey investing does tend to have a stigma surrounding it so you have to stay extra diligent.

      Have you heard about Ohio Cashflow?

      I heard that they are pretty good also lol

      Sorry for the shameless plug lol

      Much success

  4. Robert Britton

    Definitely agree with this article, I’ve worked with turnkey companies and while they are professional and friendly I did find they put quite a bit of pressure on to close the deal. The properties they sold also ended up underperforming so I eventually sold them off. In the end I would have been better off skipping over these “deals” and waiting for a better one to come along.

    • Engelo Rumora

      Thanks for your comment Robert and sorry for your troubles.

      I run a turnkey company and the #1 rule that I have is “ZERO PRESSURE”.

      I think that this is important for any business and something that all consumers should wholeheartedly consider.

      For example, I get super turned off when buying something and if the salesperson is trying to put pressure on me.

      I tend to balk and run away lol

      I suggest that everyone does the same no matter what.

      There will always be another opportunity around the corner.

      Where one door closed another will open

      Much success

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