Where to find out of state Turnkey properties?

[Sara Soleimani]

We are new to out of state investment and were wondering where to find the deals? Turnkey companies? MLS? Should we find local agents? What is the advantage and disadvantage of going with a Turnkey company? Having a team all together?

Any advice is really appreciated! Thank you:)

[Maxwell Lee]

You can find plenty of info about turnkeys, pros and cons, questions to ask, etc on this site. But to give you a broad overview:

First, the definition. Turnkey in its true form should mean fully-rehabbed. Usually with tenant in place and PM company in-house. So with that established

Pros - 

1) Your work is minimal. You only need to thoroughly vet one provider, who would "replace"the realtor, GC, and PM in your team. You would also only need to manage one ongoing relationship. REI isn't 100% passive as you do always need to manage your vendors/workers to some degree.

2) You should have a stable asset. Capex should not come into play for awhile as all major systems are brand new, and since the turnkey company did the work they should be the ideal candidate to manage the property. If they stand by their product, and if they believe they can get you a good tenant, they should also be able to handle the PM responsibilities with little no problem...in theory.

3) Cash flow from day 1. Some turnkeys will allow you to close after tenants are placed. Which means you get rent checks as soon as you purchase the home. And you can definitely buy with a loan. If you went at it yourself, for a similar fixer upper you'd probably have to buy with cash and you wouldnt get a rent check during the rehab phase or while the property is listed for rent. Could be many months...

Cons - 

1) You pay a premium for the convenience of a finished product. Rarely will you be buying at a discount and some turnkeys argue that you must pay over market as your product is of better quality than what's available on the market. 

2) If you picked a poor turnkey then they can really screw you. Definitely find a way to get a third party opinion...from a realtor, an inspector, or even other investors. 

Good luck!!