Negotiate on turn-key price

9 Replies

Has anyone considered or successfully negotiated the price down for a turnkey property? Many of the turnkey properties I see are priced significantly higher than the FMV (comps). I can understand a small (

This is also assuming there are no other buyers at the listed price.

Originally posted by @Michael L. :
Has anyone considered or successfully negotiated the price down for a turnkey property? Many of the turnkey properties I see are priced significantly higher than the FMV (comps). I can understand a small (<5%) up sell, but in cases where the price is 10-15% over FMV, can you negotiate down?

This is also assuming there are no other buyers at the listed price.

Some of the reasons why they are much more $$$ then what they should be us due to there being more than 1 person wanting a piece of the pie and also they some are priced based on the cap rate on not actual value.

In saying that it is very hard to find out what the real value is in a Class area as they are all over.

I don't trust comps in C class areas.

We sell turnkey in Ohio and are not negotiable but then again we offer deals at below appraised value and only B class.

Thanks for reading and have a great day.

Doubtful. Turnkeys will almost always be right around market value or maybe a little higher, but it's hard to tell a lot of times with comps for a couple reasons- where are you getting the comps from (Zillow and such?) and how accurate are the comps? Turnkeys almost always pop up in neighborhoods that had a lot of foreclosures so a lot of the "comps" are properties still in short sale, foreclosure, or destroyed mode. Not an accurate comparison.

But in short, no. Turnkeys sell too fast and too easy for negotiation typically.

just because no one on this site has negotiated a lower price for a turnkey doesn't mean it can't be done. My belief is that EVERYTHING is negotiable. The worst thing that can happen is they say no.

Thanks @Ali Boone , @Albert Hasson , @Engelo Rumora for the responses.

@Ali Boone Yes, I have been looking at Zillow mainly, but I also look at current 'For Sale' listings. I feel the active listings give better insight as they typically have more pics to show condition.

You're probably right about turn-keys still selling too quickly for much if any negotiation room.

Of course. I always negotiate every purchase. Success depends on market conditions. Ultimately the purchase has to meet my criteria. If not I am happy to pass on it.

It is usually easy to negotiate with turnkey providers. They almost always have a significant fee built in for affiliates. I have frequently gotten prices reduced. Turnkeys have big margins because they often have big infrastructure so if they wont negotiate at all find another company.

(NB: My experience with turnkeys is limited to 3 cities, Memphis, Phoenix and Atlanta so I may be wrong about other markets.)

@Dean Letfus , interesting to know. Those are a couple of markets I am interested in. Would you mind recommending any turnkey providers in Memphis and Atlanta?

@Michael L. Once I understood what people thought Turnkey was in America I changed our company name so as to not be associated with it so No I wouldn't recommend any Turnkey suppliers as I think investors simply pay too much from Turnkeys.

However if your investing needs means you need completely hands off no risk all done for you investing then there are plenty of good operators in Memphis who lurk on this site. For Rolls Royce level there is only one choice which is Memphisinvest.

Alex Craig and Jeremy Veldman both have pretty pristine reputations and are more middle of the road price wise.

@Michael L. -

First, I agree with @Dean Letfus that the word Turnkey means so many different things to different people that is now just a marketing word. It simply means passive, but so many people try and make it mean more.

I would recommend you go into buying a turnkey property the same way you would anything else. There is no harm in trying to negotiate a lower price on anything. As @Albert Hasson pointed out, the worst someone can say is no. All of the commentators on here are correct in that it all depends on the situation of the company you are working with. If they are able to move their properties with relative ease, they will have no incentive to lower their pricing.

High demand for a companies product, is going to directly correlate with how good they are at providing service. That brings me to one last point.

Cheap is not always better and someone who will drop a price does not always mean the property they are selling or the service they are providing is better. In some cases, it could mean the exact opposite and a company that does not bring in enough revenue from sales is a company that cannot provide good service and management on the back end.

It is a fine line all the way around and you as a consumer have to really do your homework and understand what value you get for any price you are paying.

So again, ask if you can negotiate. Get answers and understand why a company says yes or no and take that into consideration. Lastly, I think @ANISH TOLIA is exactly correct when he said that the deal has to be the right deal for you or you do not purchase.

Whether you pay their price or your price doesn't matter as much as paying the right price for the right service.

Good luck to you with whatever direction you go!

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