Turnkey Feedback for current & future investors

[V.G Jason]

I know if you search turnkey, you get a ton of various feedback. But I wanted to consolidate a bit here. Any recommendations and most importantly any recent horror stories of some. 

The most obvious things I notice is a lot of Turnkey places offering inflated prices, which is fine, and I can respect that but really exaggerating on neighborhood quality. They'll say B+ in a C- area and just hope you don't research the area a bit harder. Hard to be B+ if walk score is low, school scores are low, etc. I've noticed that on ALL of the big name Turnkey websites. 

Another trick they do is say property management free for 1 year, 8% for year 2 and on the pro forma show you make $200/mo cash flow with ppt mgmt at 0%. It's like year 2, I'm eating away all that "cash flow". They're hoping you don't do any future projections. These points go for all of them RtR, REI, JWB, Memphis Invest, Pinnacle Properties, Martel, etc. All the one's on this board.

For people that invest....feedback please? For one's that are on the verge of investing, thoughts? I know @Austin Fowler has great things to say about REI, which is good to hear. But I'd like to hear more, as an OOS, Turnkey is naturally a bit more inviting but doing basic due diligence is showing me that there's a lot of inconsistency. I'm cool with the mark up, go for it. But the neighborhood hoodwinking and pro forma cover up, that ain't going to fly.

Also, for any current investors, did you guys pay the properties a visit physically?

[Nathan Gesner]

Quote from @V.G Jason:

I'll just add that "easy" comes with a price. There are so many ways that a turnkey company can screw the investor if you don't know what you're doing or read the fine print.

If you have the money, I recommend investing in syndications instead of turnkey. Syndicators are probably more accurate with their return predictions because some of their investors have a ton of money and a team of attorneys to hold them accountable.

[V.G Jason]

Quote from @Nathan Gesner:

Quote from @V.G Jason:

I'll just add that "easy" comes with a price. There are so many ways that a turnkey company can screw the investor if you don't know what you're doing or read the fine print.

If you have the money, I recommend investing in syndications instead of turnkey. Syndicators are probably more accurate with their return predictions because some of their investors have a ton of money and a team of attorneys to hold them accountable. 

 I need to read the fine language on turnkeys. I feel like it could be a scenario where you are a prisoner to their settings. And if that's the case, I really will have to spend a lot of time digging into these cities one by one, paying them a visit, and really doing diligence on the property management companies. All these 4-5 stars you read online are of tenants, very rarely are they of landlords. When I talk to one now they say oh I have 4.7 stars in Detroit, I'm like not a single one is from a landlord.

As for syndications, I've done all those allocations in 2022. In 2023, once I assess my tax situation, I wanted to do my physical allocations steadily over the course of the next 5-7 years. Do 1-3 houses per year, ideally, but no set target. Market will dictate that & my personal businesses, but that's a conservative target. Majority of my REI allocation would be in syndications even with that projection.

[Chris Clothier]

Quote from @V.G Jason:

I know if you search turnkey, you get a ton of various feedback. But I wanted to consolidate a bit here. Any recommendations and most importantly any recent horror stories of some. 

The most obvious things I notice is a lot of Turnkey places offering inflated prices, which is fine, and I can respect that but really exaggerating on neighborhood quality. They'll say B+ in a C- area and just hope you don't research the area a bit harder. Hard to be B+ if walk score is low, school scores are low, etc. I've noticed that on ALL of the big name Turnkey websites. 

Another trick they do is say property management free for 1 year, 8% for year 2 and on the pro forma show you make $200/mo cash flow with ppt mgmt at 0%. It's like year 2, I'm eating away all that "cash flow". They're hoping you don't do any future projections. These points go for all of them RtR, REI, JWB, Memphis Invest, Pinnacle Properties, Martel, etc. All the one's on this board.

For people that invest....feedback please? For one's that are on the verge of investing, thoughts? I know @Austin Fowler has great things to say about REI, which is good to hear. But I'd like to hear more, as an OOS, Turnkey is naturally a bit more inviting but doing basic due diligence is showing me that there's a lot of inconsistency. I'm cool with the mark up, go for it. But the neighborhood hoodwinking and pro forma cover up, that ain't going to fly.

Also, for any current investors, did you guys pay the properties a visit physically?

 V.G, 

The first thing to understand is that a lot of companies and individuals have used the word to Turnkey to describe themselves or their company and many operate differently. You listed companies that buy, renovate, sell and manage properties as well as companies that do two or three of those things and one company that is a promoter. Promoters specialize in helping smaller companies without sales teams in finding buyers for their properties. They all use the word Turnkey to describe the experience you will have no matter how they operate. Memphis Invest is the same company as REI Nation. The name change occurred in 2019 when REI moved into our 4th state and it made sense to use a brand highlighting we were no longer just working Memphis and Dallas. We had been planning the brand change since 2015 when we first started using the brand REI Nation to buy properties.

I have a couple of pieces of advice and I understand you're not asking here on BP for my input.  You want to hear from investors who can give real life experience and probably beyond the past year or two.  

1. In my experience, investors are more apt to share a real experience in private messaging. Many have shared on here that they are investors and shared part of their story, but area also passive investors and not super active on the site. Try sending direct message to anyone who has posted that they have bought. May take a little bit of time, but I know several REI Nation investors who tell me that they connect on an almost weekly basis with investors wanting to get the "real story" . I would imagine there are other investors making the same connections and sharing stories privately good and bad.

2.  Due diligence is massively important.  Yes, you should at a minimum meet who are going to do business with and the management of your properties is by far the most important factor.  However, even a good management company is going to struggle with a poorly renovated house with issues.  Should you visit a property you are buying?  Maybe.  It will depend on how you feel as an investor after interviewing who you want to do business with and meeting them in person.

As for numbers and neighborhoods.  I hate the A,B,C scale of neighborhood grading.  It is arbitrary and easily abused because it can be deceptive.  In my experience, the best judge of a quality property is price point. The further below median price for an area, the lower the demand will be for the property.    As for the numbers, I think the two best questions you can ask and should ask from any provider are "why" and "how".  

Everyone uses different numbers for different reasons.  The question an investor should ask is, "Why do you use these calculations"?  You want to hear how they justify the numbers they show.  Then ask, "How do you make a property perform to those numbers"?  

The reality is, most investors can tell when they are being fed bs.  It really comes into focus when you meet in person.  Do they have the team to perform to the level you expect?  Can they actually perform as good as they will need to perform based on how they present themselves and the way their numbers read on paper.  In the end, you can then decide if you even need to see properties based on the eye test.  

Good luck to you.  Hopefully you get a few more responses here from actual investors.

[V.G Jason]

Quote from @Chris Clothier:

Quote from @V.G Jason:

I know if you search turnkey, you get a ton of various feedback. But I wanted to consolidate a bit here. Any recommendations and most importantly any recent horror stories of some. 

The most obvious things I notice is a lot of Turnkey places offering inflated prices, which is fine, and I can respect that but really exaggerating on neighborhood quality. They'll say B+ in a C- area and just hope you don't research the area a bit harder. Hard to be B+ if walk score is low, school scores are low, etc. I've noticed that on ALL of the big name Turnkey websites. 

Another trick they do is say property management free for 1 year, 8% for year 2 and on the pro forma show you make $200/mo cash flow with ppt mgmt at 0%. It's like year 2, I'm eating away all that "cash flow". They're hoping you don't do any future projections. These points go for all of them RtR, REI, JWB, Memphis Invest, Pinnacle Properties, Martel, etc. All the one's on this board.

For people that invest....feedback please? For one's that are on the verge of investing, thoughts? I know @Austin Fowler has great things to say about REI, which is good to hear. But I'd like to hear more, as an OOS, Turnkey is naturally a bit more inviting but doing basic due diligence is showing me that there's a lot of inconsistency. I'm cool with the mark up, go for it. But the neighborhood hoodwinking and pro forma cover up, that ain't going to fly.

Also, for any current investors, did you guys pay the properties a visit physically?

 V.G, 

The first thing to understand is that a lot of companies and individuals have used the word to Turnkey to describe themselves or their company and many operate differently. You listed companies that buy, renovate, sell and manage properties as well as companies that do two or three of those things and one company that is a promoter. Promoters specialize in helping smaller companies without sales teams in finding buyers for their properties. They all use the word Turnkey to describe the experience you will have no matter how they operate. Memphis Invest is the same company as REI Nation. The name change occurred in 2019 when REI moved into our 4th state and it made sense to use a brand highlighting we were no longer just working Memphis and Dallas. We had been planning the brand change since 2015 when we first started using the brand REI Nation to buy properties.

I have a couple of pieces of advice and I understand you're not asking here on BP for my input.  You want to hear from investors who can give real life experience and probably beyond the past year or two.  

1. In my experience, investors are more apt to share a real experience in private messaging. Many have shared on here that they are investors and shared part of their story, but area also passive investors and not super active on the site. Try sending direct message to anyone who has posted that they have bought. May take a little bit of time, but I know several REI Nation investors who tell me that they connect on an almost weekly basis with investors wanting to get the "real story" . I would imagine there are other investors making the same connections and sharing stories privately good and bad.

2.  Due diligence is massively important.  Yes, you should at a minimum meet who are going to do business with and the management of your properties is by far the most important factor.  However, even a good management company is going to struggle with a poorly renovated house with issues.  Should you visit a property you are buying?  Maybe.  It will depend on how you feel as an investor after interviewing who you want to do business with and meeting them in person.

As for numbers and neighborhoods.  I hate the A,B,C scale of neighborhood grading.  It is arbitrary and easily abused because it can be deceptive.  In my experience, the best judge of a quality property is price point. The further below median price for an area, the lower the demand will be for the property.    As for the numbers, I think the two best questions you can ask and should ask from any provider are "why" and "how".  

Everyone uses different numbers for different reasons.  The question an investor should ask is, "Why do you use these calculations"?  You want to hear how they justify the numbers they show.  Then ask, "How do you make a property perform to those numbers"?  

The reality is, most investors can tell when they are being fed bs.  It really comes into focus when you meet in person.  Do they have the team to perform to the level you expect?  Can they actually perform as good as they will need to perform based on how they present themselves and the way their numbers read on paper.  In the end, you can then decide if you even need to see properties based on the eye test.  

Good luck to you.  Hopefully you get a few more responses here from actual investors.

 I appreciate your response. And no, I do want your feedback. I understand you're going to come with a bias, but anyone who doesn't lacks common and business sense. 

I do gather people who have invested would feel more compelled to share via DM. However, I've only talked to two that have and looking for more. If someone wants to share in private, I'm all ears. As for due diligence, it's beyond meeting them. I'm trying to understand the contingencies. How much am I really owing to you at all costs? 

The median price theory is hard, simply because there are so many factors. There's a condo near me in Miami, that has relatively low prices. Way below what most would figure for the area. The reason being is it's heavily STR and open ended HOA wise with moderate fees. There's another way above the median with absolutely no STR, strict HOAs. Literally across the street from one another. It really skews it, OOS go to the STR place like crazy but deal with headaches left and right. You're gaining AirBnB esque clients living their best life in Miami with little consequences, it doesn't attract the high end people that live across the street. It attracts the 7 young 20 girls trying to cram in a 2br loft.

It's very hard to pinpoint specific areas to look at. I feel population growth, rental population, house appreciation, crime rate in zip codes is probably the best way to look at it. I just find it very deceiving when they go and say "B" grade. When you know for a fact it's a "D" grade. Super high renter population, high crime rate, steady population growth. Any area that's super high renter population will be deterred in quality. Likewise, any that's complete opposite is not really investor friendly as it's exclusive. The mix is hard. But I can't have such metrics stand out and be told it's an above average neighborhood. Just doesn't work.

[V.G Jason]

Quote from @Nathan Gesner:

Quote from @V.G Jason:

I'll just add that "easy" comes with a price. There are so many ways that a turnkey company can screw the investor if you don't know what you're doing or read the fine print.

If you have the money, I recommend investing in syndications instead of turnkey. Syndicators are probably more accurate with their return predictions because some of their investors have a ton of money and a team of attorneys to hold them accountable.

 Do you invest strictly in your own backyard? As I take a look at it, regulating in my backyard may be the best situation for me. I was pursuing OOS due to ability to scale. Buying in Austin and/or Miami would limit my ability given the HCOL and lack of return. Investing OOS without a team in place seems like a large amount of exposure. 

[Nathan Gesner]

Quote from @V.G Jason:

I have only invested locally. I wanted to invest in other states, but every time we saved up money to invest another opportunity opened up locally and we stayed local. We're looking in other markets now, but I also know prices are dropping so I'm letting it play out before diving in.

[V.G Jason]

Quote from @Nathan Gesner:

Quote from @V.G Jason:

I have only invested locally. I wanted to invest in other states, but every time we saved up money to invest another opportunity opened up locally and we stayed local. We're looking in other markets now, but I also know prices are dropping so I'm letting it play out before diving in.

 When you go out of state, do you intend to manage from afar or defer to a PM? I can already tell you will not use TK.

[Nathan Gesner]

Quote from @V.G Jason:

Quote from @Nathan Gesner:

Quote from @V.G Jason:

I have only invested locally. I wanted to invest in other states, but every time we saved up money to invest another opportunity opened up locally and we stayed local. We're looking in other markets now, but I also know prices are dropping so I'm letting it play out before diving in.

 When you go out of state, do you intend to manage from afar or defer to a PM? I can already tell you will not use TK.

 I would use a PM. My freedom and family are far more important than another 10% income, and I know that a good PM will do a better job of understanding the market, reducing vacancy, and other tasks that produce a higher return.

[V.G Jason]

Quote from @Nathan Gesner:

Quote from @V.G Jason:

Quote from @Nathan Gesner:

Quote from @V.G Jason:

I have only invested locally. I wanted to invest in other states, but every time we saved up money to invest another opportunity opened up locally and we stayed local. We're looking in other markets now, but I also know prices are dropping so I'm letting it play out before diving in.

 When you go out of state, do you intend to manage from afar or defer to a PM? I can already tell you will not use TK.

 I would use a PM. My freedom and family are far more important than another 10% income, and I know that a good PM will do a better job of understanding the market, reducing vacancy, and other tasks that produce a higher return.

I agree with the price for freedom. I intend to hire PM even if I invest in my backyard. I guess finding the right agent, PM, and handyman, is more of importance than anything else. They might have access to the houses I can't find posted publicly too. Let me get in contact with the better one's.

[Gregg Cohen]

Hi @V.G Jason - Thanks for opening up the discussion.  

At JWB, we care deeply about setting realistic expectations for return on investment for our clients who buy turnkey rental properties with us in Jacksonville.

In order to accomplish this, we have to know our numbers and make sure we can hit them for our clients.  To that end, all numbers on JWB property evaluations including property management fees, maintenance costs, vacancy costs, rent rates, rent appreciation, future operating costs increases, and future home price appreciation are based on actual costs or assumptions which are backed up by historical data. 

We have a big advantage in this area because we've sold over 2,900 turnkey rental properties since starting our business 17 years ago and we track just about everything.

The cool thing is we can see how we've performed over the years. 100% of JWB clients are beating their initial return on investment expectations including all income / growth  and all property related expenses.

[Leslie Y Wilson]

I would say that investing with a turnkey provider boils down to trust. I had a disastrous experience investing with a turnkey provider in Detroit who only lasted a few short years in business with ALOT of BBB complaints after I had invested. I bought 6 properties that were basically rehabbed with chewing gum & bailing wire so I became pretty involved in redoing the previous rehabs & property management. Then I watched Greg Cohen with JWB for 5 years determined not to trust too quickly. During the 5 years I saw Greg at least annually at Fortune Builders events. I saw the price of his turn key homes go up every year. Then last year I refinanced a couple of local properties I had along with my primary residence & I spent the money with JWB by purchasing another 5 SFR's. Greg is the real deal & he has built a company I can trust. He is honest & transparent & so are his employees. I couldn't be more pleased with my build to rent portfolio in Jacksonville that I purchased from JWB that they also manage.

[Dean Curry]

Unfortunately the Term Turnkey is very generic.  Turnkey for someone that does remodeling work is different from someone that buys the occasional property and has another full time occupation.  Both instances can have Turnkey properties yet have very different starting points.  Our business has over 20 rental units. Within the last 15 months we found JWB in Jacksonville Fl.  Wow, what an organization.  They handle everything.  The find the property, they rehab it, or build it and then sell to investors like me.  They find the tenants and sign them up for leases that are multiple years in length with build in rent increases.  Their PM program is excellent.  I have begged the PM’s of other properties outside the service area of JWB to offer some of the same services to no avail.  Another turnkey provider we use told me “If I (the investor) have to spend more than 4 hours a year working/handling issues with my properties under management with them then they are doing something wrong!”  That is a true Turnkey experience.  We couldn’t be more pleased with our experience with JWB.  Their reporting is accurate and out perform their original estimated returns.  They offer great PM but also educational tools to further knowledge in the industry. They offer PML programs and helped us through some 1031 exchanges within the last year.  We have bought 7 properties from them and plan to buy more as the opportunities present themselves.

[V.G Jason]

Smells fishy in here.

Lots of threads with JWB stuff show single post posters coming into chime in. I think I recall about at least 3-4 of these when looking at it. Needless to say, that option is written off. Believe you are recommended to not even visit. Hard pass, just my opinion.

[Gregg Cohen]

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

[V.G Jason]

Quote from @Gregg Cohen:

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

 I'm against moderation or censorship, so it's a free world you can do as you like. There's just consequences to it. I wouldn't be the person to ask the right way to go about it in the future or not. 

For me, personally, the feedback I look for is the person that had the worst experience, hear both sides, and see what came about. That's how I really generate my trust in working with a company. Hearing random people share their great experiences is cool, I just need to know my downside. 

[Leslie Y Wilson]

Quote from @V.G Jason:

Smells fishy in here.

Lots of threads with JWB stuff show single post posters coming into chime in. I think I recall about at least 3-4 of these when looking at it. Needless to say, that option is written off. Believe you are recommended to not even visit. Hard pass, just my opinion.

 Don't feel fishy. I am a real person (not a BOT) and what I posted was my real experience & opinion. It is true that Greg Cohen made a request in the JWB Facebook Group for clients to give their honest opinion on your post. So THAT is why I signed up for Bigger Pockets.  These things take way more time than I usually want to spend as I would rather spend my time elsewhere like traveling & visiting friends. I am financially free & living my best life. I consider Greg a friend as well as a vendor so I made the effort to post on your thread. Go ahead & make a "hard pass" & not even visit the JWB website & podcast as it will just leave more good deals for me ! 

[Leslie Y Wilson]

Quote from @V.G Jason:

Quote from @Gregg Cohen:

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

 I'm against moderation or censorship, so it's a free world you can do as you like. There's just consequences to it. I wouldn't be the person to ask the right way to go about it in the future or not. 

For me, personally, the feedback I look for is the person that had the worst experience, hear both sides, and see what came about. That's how I really generate my trust in working with a company. Hearing random people share their great experiences is cool, I just need to know my downside. 

You want to hear about the WORST Experience...Look up BuyPD LLC out of Utah or look up Lift Property Management in Shelby Township Michigan. I was WAY too trusting & naively thought that real estate was the same regardless of the state it was located in. Very hard lessons to learn but fortunately I was able to take control & wait out the over-investment that I had initially made in 2014. The properties in Detroit are still really cheap when compared to Denver but they are cheap for a REASON. I had a tenant commit Section 8 fraud by signing a lease & then giving the keys to my house to a "friend" who used it as a drug house. I found out about this when the police called my new property manager after I fired LIFT & informed them that they were removing a dead body from the house & that they had declared my property a drug house. The new property manager, Service Specialties II got a hold of the original tenant & told her that we wouldn't file charges against her with Section 8 if she would clean up the property to our satisfaction, turn in all keys to the property & forfeit her security deposit as a liquidated damage. Right before we had rented to this tenant the furnace and hot water heater were take from the property while it was vacant & protected by a simply safe wireless security system. Who would take or more importantly buy a used hot water heater? They do in Detroit! I still own this property but it is not an easy one to manage because it is located in a rough neighborhood. There is great cashflow when I get a good tenant but I usually have to rebuild the place in between tenants.

[Bob Stevens]

They key is to connect with a team that is in it for the long term. One that has a mutual benefit. I know dozens of investors that pay for " turnkey" and are buying below the appraised value 100% hand off with double digit net caps based on cash purchases. Its all about your team 

Good luck 

[Geoff Bolton]

Good discussion so far.  Key to turnkey is not to think about it as turnkey.   You are buying an illiquid long term asset so the deal needs to be looked at the same way you would a non turn key asset.  There are no guaranties that your provider will be around for the next 10 years so you need to do the same level of diligence.    Sounds like others have had worse experiences then I have but I missed a few things that I should have by being a little too trusting.   (net less then a few $K in extra costs)  

Looking back the deals I did 2 years ago they cash flowed day 1 and at the time I really liked JWB's deal sheets and sales pitch.  Their sheets had market appreciation set a 0% and they talked about it as being great and something you could be reasonably certain of only if you hold the asset for a full market cycle. That being appreciation in the short term is speculation, risky and not something you should count on when making a call about doing the deal.  

That said, recently their focus seems to have shifted a bit.  Their deal sheets were revised to add appreciation to the rate of return.  While that makes sense from a sales side and it is more consistent with other providers pitch (no longer seeing JWB Apples vs others Apple Pie) I would pull that from the deal decision as the property has to support itself day 1.   It needs to be cash flow positive (including expected maintenance and vacancy).  

I think the JAX market has shifted as home price appreciation has outpaced rental rates and it is looking like similar JWB properties are no longer cash flow positive day 1.  That data is visible in their deal sheet, but you have to look at the year over year details not the top line cash flow number.  That top line number does not include maintenance and vacancy.     

[V.G Jason]

Quote from @Leslie Y Wilson:

Quote from @V.G Jason:

Quote from @Gregg Cohen:

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

 I'm against moderation or censorship, so it's a free world you can do as you like. There's just consequences to it. I wouldn't be the person to ask the right way to go about it in the future or not. 

For me, personally, the feedback I look for is the person that had the worst experience, hear both sides, and see what came about. That's how I really generate my trust in working with a company. Hearing random people share their great experiences is cool, I just need to know my downside. 

You want to hear about the WORST Experience...Look up BuyPD LLC out of Utah or look up Lift Property Management in Shelby Township Michigan. I was WAY too trusting & naively thought that real estate was the same regardless of the state it was located in. Very hard lessons to learn but fortunately I was able to take control & wait out the over-investment that I had initially made in 2014. The properties in Detroit are still really cheap when compared to Denver but they are cheap for a REASON. I had a tenant commit Section 8 fraud by signing a lease & then giving the keys to my house to a "friend" who used it as a drug house. I found out about this when the police called my new property manager after I fired LIFT & informed them that they were removing a dead body from the house & that they had declared my property a drug house. The new property manager, Service Specialties II got a hold of the original tenant & told her that we wouldn't file charges against her with Section 8 if she would clean up the property to our satisfaction, turn in all keys to the property & forfeit her security deposit as a liquidated damage. Right before we had rented to this tenant the furnace and hot water heater were take from the property while it was vacant & protected by a simply safe wireless security system. Who would take or more importantly buy a used hot water heater? They do in Detroit! I still own this property but it is not an easy one to manage because it is located in a rough neighborhood. There is great cashflow when I get a good tenant but I usually have to rebuild the place in between tenants.

 Worst experience at JWB. And before you say you've had none, answer me when you've faced your first about of adversity. That's the rule of thumb before you give any reviews. And if you tell me you never have or will, then yeah, fishy.

And have you exited any property with JWB investments yet? That's the real  tell tale if you've truly had success. It can go well.....for now. I need to know it went well.

[V.G Jason]

Quote from @Geoff Bolton:

Good discussion so far.  Key to turnkey is not to think about it as turnkey.   You are buying an illiquid long term asset so the deal needs to be looked at the same way you would a non turn key asset.  There are no guaranties that your provider will be around for the next 10 years so you need to do the same level of diligence.    Sounds like others have had worse experiences then I have but I missed a few things that I should have by being a little too trusting.   (net less then a few $K in extra costs)  

Looking back the deals I did 2 years ago they cash flowed day 1 and at the time I really liked JWB's deal sheets and sales pitch.  Their sheets had market appreciation set a 0% and they talked about it as being great and something you could be reasonably certain of only if you hold the asset for a full market cycle. That being appreciation in the short term is speculation, risky and not something you should count on when making a call about doing the deal.  

That said, recently their focus seems to have shifted a bit.  Their deal sheets were revised to add appreciation to the rate of return.  While that makes sense from a sales side and it is more consistent with other providers pitch (no longer seeing JWB Apples vs others Apple Pie) I would pull that from the deal decision as the property has to support itself day 1.   It needs to be cash flow positive (including expected maintenance and vacancy).  

I think the JAX market has shifted as home price appreciation has outpaced rental rates and it is looking like similar JWB properties are no longer cash flow positive day 1.  That data is visible in their deal sheet, but you have to look at the year over year details not the top line cash flow number.  That top line number does not include maintenance and vacancy.     

Yeah what you're missing is you are already buying the property overpriced. The value in real estate is the cash flow and the equity you hold that binds with it appreciating. All of those properties are overpriced in pretty **** neighborhoods. If you were to flip the house asap after buying it, before any seller fees, you'd be OTM steeply. So by buying these houses, you probably need to wait at least 5, probably closer to 7-10, to break even on your appreciation. If you've cash flowed successfully till then, hallelujah. It's likely you've already had one,  if not a few, random large(r) expenses that's kept your cash flow rate decent but not that excellent.  And btw, that net few $k you lost in extra costs is probably all of your cash flow for like 3-7 years.

We can take a simple example, let's look at this house. 

32207 zip code shows median price is $290k, that's great--it's below. Let's look at price per sq ft. It's $193 on average. This house is listed at 1,200 sq ft. At $193, that's worth $230k. 

Let's look at the risks of this property, in regards to neighborhood and natural hazards. It's in a D to borderline C- neighborhood for one and has increased risked of flooding. Granted, this isn't major, but it this is increasing. Climate change isn't synonymous with bad, but if it's a developing pattern it may be worth keeping your eyes on if it's a long-term investor.

If I wanted to take it a step further, I'd find comparable properties and see where they are listed. So let me do that.  

In this example, I'm paying probably $20k over it's worth at minimum. These houses I put as examples can all be negotiated, so mark 1-5% off if you're buying. That eliminates years worth of legitimate appreciation, before I break even. 

If I'm wrong, can someone show me 5-10 examples of any turnkey property behind sold for a profit later? At any of these places-- JWB, REI, Rent to Retirement. 5-10 is a minute percentage versus how many houses being sold.

Show me examples of the properties being sold for a legitimate profit after. I'm talking net seller fees, net cash flow hurdles through the owning process, basically everything from Day 1 to Day 3650. Show me examples of there being net profit. I'm not saying it's impossible, I am just saying prove it.

[V.G Jason]

Quote from @Bob Stevens:

They key is to connect with a team that is in it for the long term. One that has a mutual benefit. I know dozens of investors that pay for " turnkey" and are buying below the appraised value 100% hand off with double digit net caps based on cash purchases. Its all about your team 

Good luck 

 Cash only is going to deter lots of potential investors. But truth be told, are you promoting your own turnkey solutions? If so, let's hear it.

[Bob Stevens]

Quote from @V.G Jason:

Quote from @Bob Stevens:

They key is to connect with a team that is in it for the long term. One that has a mutual benefit. I know dozens of investors that pay for " turnkey" and are buying below the appraised value 100% hand off with double digit net caps based on cash purchases. Its all about your team 

Good luck 

 Cash only is going to deter lots of potential investors. But truth be told, are you promoting your own turnkey solutions? If so, let's hear it.

 Absolutely am not, I am simply stating I know many that pay cash, ( like me )  and get great returns/ service and buy below the appraised value. 

All the best 

[Leslie Y Wilson]

Quote from @V.G Jason:

Quote from @Leslie Y Wilson:

Quote from @V.G Jason:

Quote from @Gregg Cohen:

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

 I'm against moderation or censorship, so it's a free world you can do as you like. There's just consequences to it. I wouldn't be the person to ask the right way to go about it in the future or not. 

For me, personally, the feedback I look for is the person that had the worst experience, hear both sides, and see what came about. That's how I really generate my trust in working with a company. Hearing random people share their great experiences is cool, I just need to know my downside. 

You want to hear about the WORST Experience...Look up BuyPD LLC out of Utah or look up Lift Property Management in Shelby Township Michigan. I was WAY too trusting & naively thought that real estate was the same regardless of the state it was located in. Very hard lessons to learn but fortunately I was able to take control & wait out the over-investment that I had initially made in 2014. The properties in Detroit are still really cheap when compared to Denver but they are cheap for a REASON. I had a tenant commit Section 8 fraud by signing a lease & then giving the keys to my house to a "friend" who used it as a drug house. I found out about this when the police called my new property manager after I fired LIFT & informed them that they were removing a dead body from the house & that they had declared my property a drug house. The new property manager, Service Specialties II got a hold of the original tenant & told her that we wouldn't file charges against her with Section 8 if she would clean up the property to our satisfaction, turn in all keys to the property & forfeit her security deposit as a liquidated damage. Right before we had rented to this tenant the furnace and hot water heater were take from the property while it was vacant & protected by a simply safe wireless security system. Who would take or more importantly buy a used hot water heater? They do in Detroit! I still own this property but it is not an easy one to manage because it is located in a rough neighborhood. There is great cashflow when I get a good tenant but I usually have to rebuild the place in between tenants.

 Worst experience at JWB. And before you say you've had none, answer me when you've faced your first about of adversity. That's the rule of thumb before you give any reviews. And if you tell me you never have or will, then yeah, fishy.

And have you exited any property with JWB investments yet? That's the real  tell tale if you've truly had success. It can go well.....for now. I need to know it went well.

 MY apologies. I did not realize that I had to have a bout of adversity with JWB in order to give a review.  There are risks in any financial investment - some things that you can control & some that you cannot.  I am not planning on flipping my JWB properties within the next 20 years or negotiating for a bare bones acquisition cost.  I know that I have paid a market price for these homes & I am fine with that. I have purchased new construction on infill lots in Jacksonville that were constructed by JWB as a part of their build to rent strategy. I enjoy lower insurance costs with the new construction and I don't have to spend money updating anything. I have insurance for the acts of nature that I cannot control. Everything has been wrapped into my mortgage with the highest interest rate being 4.125% but most being 3.25% & 3.99%. I can deduct the mortgage interest & my tenants help pay down my mortgage so I don't have to pay taxes each year on that principal reduction. There are other financial benefits to enjoy other than the monthly positive cashflow. We are in inflationary times so I am just going to sit back & watch my asset appreciate knowing that my money is safe & not subject to the volatile swings of the stock market. I am sure that you have heard the saying that the return OF your Money is more important than the return ON your Money. Principal preservation is a real benefit to me and my houses can easily be sold to a retail end buyer if I should need to exit my rental income strategy. However I am not over-leveraged so I do not anticipate needing to do this if the real estate market contracts in the near future. JWB signs multiple year lease agreements in order to save on the turnover costs & provide their investors with income predictability. You make a pretty bold statement saying that all of the JWB properties are over priced & in ***** neighborhoods.  Time will tell I suppose but there is such a thing as gentrification for those *** neighborhoods and Jacksonville is a market attracting lots of energetic young people.

[V.G Jason]

Quote from @Leslie Y Wilson:

Quote from @V.G Jason:

Quote from @Leslie Y Wilson:

Quote from @V.G Jason:

Quote from @Gregg Cohen:

Hey @V.G Jason - That's on me.  Once I saw the thread, I posted something in our facebook group inviting some of our clients to share their thoughts on your post.  Was thinking that would be a good way to hear from others who have been down a similar path.  

Just curious to your thoughts on the best way to go about this in the future?  Is it a no-no in the BP world to encourage clients to chime in if they haven't posted on BP regularly in the past? 

 I'm against moderation or censorship, so it's a free world you can do as you like. There's just consequences to it. I wouldn't be the person to ask the right way to go about it in the future or not. 

For me, personally, the feedback I look for is the person that had the worst experience, hear both sides, and see what came about. That's how I really generate my trust in working with a company. Hearing random people share their great experiences is cool, I just need to know my downside. 

You want to hear about the WORST Experience...Look up BuyPD LLC out of Utah or look up Lift Property Management in Shelby Township Michigan. I was WAY too trusting & naively thought that real estate was the same regardless of the state it was located in. Very hard lessons to learn but fortunately I was able to take control & wait out the over-investment that I had initially made in 2014. The properties in Detroit are still really cheap when compared to Denver but they are cheap for a REASON. I had a tenant commit Section 8 fraud by signing a lease & then giving the keys to my house to a "friend" who used it as a drug house. I found out about this when the police called my new property manager after I fired LIFT & informed them that they were removing a dead body from the house & that they had declared my property a drug house. The new property manager, Service Specialties II got a hold of the original tenant & told her that we wouldn't file charges against her with Section 8 if she would clean up the property to our satisfaction, turn in all keys to the property & forfeit her security deposit as a liquidated damage. Right before we had rented to this tenant the furnace and hot water heater were take from the property while it was vacant & protected by a simply safe wireless security system. Who would take or more importantly buy a used hot water heater? They do in Detroit! I still own this property but it is not an easy one to manage because it is located in a rough neighborhood. There is great cashflow when I get a good tenant but I usually have to rebuild the place in between tenants.

 Worst experience at JWB. And before you say you've had none, answer me when you've faced your first about of adversity. That's the rule of thumb before you give any reviews. And if you tell me you never have or will, then yeah, fishy.

And have you exited any property with JWB investments yet? That's the real  tell tale if you've truly had success. It can go well.....for now. I need to know it went well.

 MY apologies. I did not realize that I had to have a bout of adversity with JWB in order to give a review.  There are risks in any financial investment - some things that you can control & some that you cannot.  I am not planning on flipping my JWB properties within the next 20 years or negotiating for a bare bones acquisition cost.  I know that I have paid a market price for these homes & I am fine with that. I have purchased new construction on infill lots in Jacksonville that were constructed by JWB as a part of their build to rent strategy. I enjoy lower insurance costs with the new construction and I don't have to spend money updating anything. I have insurance for the acts of nature that I cannot control. Everything has been wrapped into my mortgage with the highest interest rate being 4.125% but most being 3.25% & 3.99%. I can deduct the mortgage interest & my tenants help pay down my mortgage so I don't have to pay taxes each year on that principal reduction. There are other financial benefits to enjoy other than the monthly positive cashflow. We are in inflationary times so I am just going to sit back & watch my asset appreciate knowing that my money is safe & not subject to the volatile swings of the stock market. I am sure that you have heard the saying that the return OF your Money is more important than the return ON your Money. Principal preservation is a real benefit to me and my houses can easily be sold to a retail end buyer if I should need to exit my rental income strategy. However I am not over-leveraged so I do not anticipate needing to do this if the real estate market contracts in the near future. JWB signs multiple year lease agreements in order to save on the turnover costs & provide their investors with income predictability. You make a pretty bold statement saying that all of the JWB properties are over priced & in ***** neighborhoods.  Time will tell I suppose but there is such a thing as gentrification for those *** neighborhoods and Jacksonville is a market attracting lots of energetic young people.

In bold, show me one's that are not? I'm more than happy to being proven wrong. I'm just stating what I see, nothing  more than that. 

Secondly, yes, it is imperative you evaluate your relationship with anybody or anything once you face a bout of adversity. Thinking things are always holly & jolly is a fairy tale. 

In regards to your other points, yeah you're absolutely right. We are an inflationary environment, new builds let you save out on capex issues, two year rents do keep you locked in, you got a great interest. All those variables and points are facts. Even being able to hold in this environment is great, that's a testament to your position. But the thing is you need to compare apples to apples, if you would've taken your investment money and allocated it differently could you have yielded more? The answer is likely a yes. You need to evaluate this investment on a relative basis, not an absolute basis.

But if you're happy, don't be so triggered by me.