Question for Turn Key property buyers in the midwest

5 Replies

I am working on putting together more and more turn key properties for sale in our area. We have a great ROI and solid rental neighborhoods. The thing I am not quite clear on is how you are finding your deals when you buy (you, who is buying turn key properties), and what you are looking for in your management team?

I'd love any input, lessons learned, things you love about your management, you don't like, and how you are deciding on the price you are willing to pay on the investments.  I am NOT trying to garner business here, just looking for real insight from those of you either selling turn key deals, or who are actively buying/holding them.

Thanks! 

You are going to find that if you have 100 investors lined up some of them are mostly concerned about the cash flow, some ROI, price range, management company, etc....

As a turnkey provider myself the 3 things ( in no particular order ) I see that are desired are cash flow, price range and management company.  Sometimes we go through times when investors are only looking for cheap homes say $60k on average and then 2 months later they want $90k homes. 

I truly feel that the management company is the most important element along with the quality of rehab.  It doesnt matter what your figures look like on paper, if the home doesnt stay rented and there are tons or repairs then that hurts everyone.  

I would be more interested in slightly less cash flow and ROI if I can get a quality renovation with tenants who stay longer then 1yr. The turnover and make ready repairs will kill an investor considering when you truly look at what a management company total charges for a 1yr example is around 18%-20% of your yearly rent.

Good luck!!

I am an "out of state investor" even though it is a 2 hour drive from me.  I try to buy as "turn key" as possible even though I don't buy from TK companies (they don't do my area) and hands down PM is the most important thing.  I am about to have 50+ units and in my eyes, there are 2 things we can control (besides the buy) which are:

  • Vacancy
  • Repair

Those 2 things are 100% controlled by the PM.  I agree 1000% with @Curt Davis I would much rather take less ROI, or pay a great PM more, to "run a tight ship"

Originally posted by @Nathan Brooks :

I am working on putting together more and more turn key properties for sale in our area. We have a great ROI and solid rental neighborhoods. The thing I am not quite clear on is how you are finding your deals when you buy (you, who is buying turn key properties), and what you are looking for in your management team?

I'd love any input, lessons learned, things you love about your management, you don't like, and how you are deciding on the price you are willing to pay on the investments.  I am NOT trying to garner business here, just looking for real insight from those of you either selling turn key deals, or who are actively buying/holding them.

Thanks! 

Some good questions Nathan,

Ill chime in with a few quick points.

1) Prompt communication is vital from the PM.

2) I think the PM should be in-house for best results.

3) The staff to client ratio within the turnkey biz should be 1 per every 7 investors.

4) Properties should be sold at market or below.

Those are just a few haha, I don't want to reveal our entire model haha.

Thanks and have a great day ;)

I dont see how #3 is realistic but it would surely improve service!!!

I appreciate all of your input! 

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