Queesbury, NY · Member since 2017 · 21 posts · 17 votes
We are looking at turnkey rentals for our first investment property. It seems to me that the purchase contract would be sent out and expected to be returned, signed, within 48 hours or the property would be listed again for other investors.
Should this be enough time for an attorney to review or is there zero wiggle room with turnkey contracts? Sign or move on.
Just want to make sure I'm covering all my bases and not opening myself up to an issue in the future.
If you have any turnkey experience please let me know how you handled attorney review of the purchase contract.
Kapolei, HI · Member since 2014 · 42 posts · 18 votes
3y
I bought a turnkey through JWB and there was never any issue with time needed to review anything. In addition, I had many questions which were quickly answered and they let me take whatever time was needed to be comfortable with the purchase. To V.G. Jason's point above, you are the one buying and if you don't have sufficient time pass on it. I looked at several turnkey properties before buying and none that I reviewed were so special and had such urgency that they could only be held for 48 hours.
As others have stated, don't be pressured into making a hasty decision. Do your diligence to examine the offering from the legal perspective as well as making certain that the proforma seems reasonable and contains all necessary expense such as maintenance and vacancy allowances. Also beware of projections that rely heavily on value appreciation to make the numbers pencil out. Betting on appreciation is always a risky proposition, but especially today where property values may be flat or even slightly down depending on the market. Better to not plan for appreciation and get it versus relying on it and not. All the best in your investing future!
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
3y
There are turnkey companies out there who will source and rehab a property of your choice for you and then rent it out once it's done. That way, you get to pick the property, perform normal due dilligence and determine the contract contingencies on your own and you own the equity in the property rather than the provider.
So many options for how you can do this, there really is not any standard. Find something that works for you and don't be pressured in to thinking that "this is how it works."
Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
3y
I can speak to this, as I've bought multiple turnkeys. You typically have 48 hours to sign the contract. Obviously it will depend on the seller, but I'm sure they would grant an extension if you had some legal concerns about the contract. In my experience, they're standard RE buyer's agreements. They don't have binding language and you have the same due diligence options as you would on a standard transaction. I'd be highly concerned if the provider was attempting to lock me in.
But it's up to you and you need to feel comfortable with your purchase. I'd recommend connecting with @Zach Lemaster. He's been a great mentor for me and helped me pick up my first few properties.