America's Top 5 Turnkey Companies!

87 Replies

Much ink has been spilled on the subject of Turnkey Companies. However, I do not think we have managed to identify  top 5 Turnkey Companies in America.  I know there are hundreds of companies - perhaps a good place to start would be to identify those that offer a 3-year buy back policy in the event that they do not deliver on the promises?

Hahah - Nice!

1. Why would anyone offer such a guarantee? Investing, any type of investing, is inherently risky. Buyer beware...

2. You are in Indiana - mid West - fertile ground for rental SFR. Why would you want to give a middleman a bunch of your equity/profit. considering that you are not doing this long distance.

3. If you must go with turn-key, and I wouldn't recommend, the only operation with a truly proven track record in the domain of public opinion are @Chris Clothier and his family. I've never heard nor do I know of anything derogatory. The class of assets they focus on is more likely to perform as intended. 

Having said this - just buy in Indiana :)

@Ben Leybovich

 You legend! I actually just send you an e-mail :)

1) It would be nice to know that they believe in their renovations - not just a lipstick job! How about a 24-month guarantee...? Also, I just read, My Turnkey Disaster on BP.

2) I am actually living and working in Asia, but you are right, from what I am reading on BP - Indiana is indeed a good place for SFR. Thanks for the tip!

I can make a few recommendations but like Ben said, there are plenty of deals out there that can help save you about $20k (if not more) on your purchases. I found a property on the MLS in Bates Hendricks that I think I could get for 20k and it needs about 15k in repairs. Again, that was the MLS; you can find houses w/rehabs for much cheaper if you do some direct mail.

I guess if you don't want to look for deals and do the project mgmt on a small rehab, a turnkey company might be a good idea.  However, most turnkey companies would advise setting aside about $60k for a property.  I don't know any that offer a buy back guarantee.

I'd advise sticking to blue collar neighborhoods with whatever route you choose.  You don't need to buy rentals in the ghetto to cash flow nor do you need to buy rentals in Fishers to feel safe.  

Have you ever tried driving for dollars?  

Originally posted by @Account Closed :

@Ben Leybovich

 You legend! I actually just send you an e-mail :)

1) It would be nice to know that they believe in their renovations - not just a lipstick job! How about a 24-month guarantee...? Also, I just read, My Turnkey Disaster on BP.

2) I am actually living and working in Asia, but you are right, from what I am reading on BP - Indiana is indeed a good place for SFR. Thanks for the tip!

 I see the email and will respond shortly, Phil.

Brandon Turner is the legend. I am infamous for being his boyfriend...that's all :)

3 year or 24 month buy back guarantee is AMAZING!!!????  Almost like buying a stock on the NYSE and telling them if this stock goes down in next 2 or 3 years I want all my money back, not really a risky investment until after the guarantee period is over with.

As far as ranking America's top 5 TK companies I would ask Jay or Brie if they could rank them from there site Turkey-reviews.com

Most TK companies I have spoken with are against guarantees.  It has been explained to me that they don't need to woo clients with guarantees because their product speaks for themselves.  Reminds me of the Tommy Boy scene

https://www.youtube.com/watch?v=cf4C9ssuPjE

I was under contract once to buy 9 "TK" properties and what lured me in was their guarantee.... then I saw the properties and realized they had to offer a guarantee to sell them because that is the only way anybody would buy these crappy properties.  

@Account Closed as been indicated Memphis Invest is a very good company and Chris will be the first to tell you there are others out there.. Chris mentors many of them or at least I think he used to.. I know those that were invited to Memphis to shadow their operation then take it back to the market and emulate it. Not sure if Chris offers this any more but at least that's the feed back from others that I have gotten.

There is only a small sliver of TK companies active on BP.... and for me personally if I was a TK company BP open forum would not be a place I would engage in much.. Too many rookies and newbies take license to harpoon companies and really have no clue of what they are saying .. then you get the herd mentality and 30 other folks chime in when they of course have no clue either.. So I don't see a big benefit for those folks on this site.

Good news follows good companies bad news follows bad one's  reference are important. Establish a market you want to work in then look for referrals from those in the market not on a national open forum.. you will get better feedback I personally think.

this is probably one of the silliest post topics as this is all subjective to personal opinion.  How would you even gauge such a list?  Do you base it on number of sales per year, size of the company, number of satisfied clients, how much you sell a home for,etc........ 

There is really only one TK company that most likely comes to everyone's mind.  The rest are small potatoes. 

@Curt Davis

  Curt  don't sell your self short I don't think you guys are small potato's

Also I have one client of mine that sold 242 Turn keys last year... at 90 to 130k a pop that's some nice volume..

And I do business with others that have higher price points IE starting at 175k  don't do as many doors but do a lot of dollar volume... 

All in all profitable ventures..

However your correct there are many that do 40 to 80 units a year.. so in contrast I guess you could call them small potato's  but that does not mean they are not great outfits that do a very good job for the Clients.

@Derrick Craig Thanks for the response! Do you think it is reasonable to ask for some kind of guarantee when acquiring a turnkey property? Perhaps 36-months is unreasonable, what do you think about a buyback policy...if information the company provided turns out to be false?

@Curt Davis

 I do not think it is the silliest question ever. I am attending an investors club in Seoul, South-Korea, and I can assure you that there are many investors who are trying to identifying the best TK companies out there. Why is it silly? Identifying the most trustworthy companies is a most noble en-devour in my view. How do you gauge it - percentage of satisfied clients would be a good start...

A buy back guarantee is not realistic or even possible for most TK companies. I have seen some guarantee rent or no repairs for a short period of time but that's about it. Any company who offers you the moon as far as guarantees you probably don't want to do business with. 

phil I inderstand where you are coming from. Are you referring to the online meet up group from Korea?   I think the issue is that the the companies who offer so any guarantees, that should be a red flag as opposed to something that looks like a good thing.  Also the top companies are not going to have all the guarantees, and you might even pay a slight premium for their product and service. 

@Account Closed

 to reiterate Curts position buy backs are NOT feasible and a company that offers you a 2 or 3 year buy back it would only be as good as the company.. .and one thing is for sure there are only a handful of turn key operators with that type of reserve cash that could just cut you a 80 to 120k check because you asked for it...

So yes just have to establish who you wish to do business with and then vette them.

I also wrote a little e book on out of country investing.. I wrote it for Aussies when they were buying like crazy I would be happy to send it along, I make NO recommendations on markets or providers I just give you some little insider tid bits that your not going to get from marketing folks... Its a do's and don'ts type of thing.  PM me if you want me to send it along.

Originally posted by @Account Closed :

Much ink has been spilled on the subject of Turnkey Companies. However, I do not think we have managed to identify  top 5 Turnkey Companies in America.  I know there are hundreds of companies - perhaps a good place to start would be to identify those that offer a 3-year buy back policy in the event that they do not deliver on the promises?

How many stockbrokers buy your shares back if they don't perform they way you want over 3 years? No one can promise any return. Every investment has it's risks and uncertainties which is why investors need to do their own diligence.

Phil,

Based on what I have read on BP, I would buy from Chris Clothier and Ryan Mullin if I were in the market for TK investment properties. Use the search function to search for them if you're interested. However, I don't believe they offer such a guarantee.  

Disclosure: I don't know these two gentlemen personally. I have met Chris one time when he was in San Francisco for a real estate summit.  I have never met or talked to Ryan. 

@Jay Hinrichs , a 1-year buy back policy is a good place to start in my opinion. If TK providers truly believe in their products and services, they should put their money where their mouth is.  After all, clients are looking for TK/passive investments.  The provider's interests should align with their clients.  If your clients trust you, they will send so much business your way that you don't know what to do with it. Trust is a foundation of a life long relationship.

When I syndicate apartment deals. I give all my investors a 1-year guarantee. They will get a full refund with no questions asked if they change their mind within the first 12 months.  I was able to raise $1.4MM over a weekend recently.  Was that trust or too much money in the Silicon Valley?  :>)

I know someone is raising $1.1MM right now for his first syndication deal.  He got $900k committeed within the first 24 hours of sending out his email. Again, is that trust or just simply too much money sloshing around in the Silicon Valley?  :>)

@Account Closed

Like any investment there are no guarantees.  We can do the nicest renovation and property managent can qualify the tenant but it is out of any TK providers control when it comes to non paying tenants, vandalism and at times how hard renters will treat the home.  These are some of the main factors that contribute to investors to have a bad experience and it can be all out of the control of the TK provider but they are the one who the investor will look at to blame.  

Asking for a buy back guarantee is unrealistic, do your due diligence and like any investment there is a level of risk. 

God luck

@Account Closed

  the assets your buying and the assets generally bought turn key out east are not apples to apples comparisons... Your buying Bay Area investment grade assets.. and even I would do what your doing with no problem because the risk of a default or loss because of tenant issues in the bay area is so very remote to be non existent.  Not the case in 120k and under TK rental homes.. some do fine others have issues... And if you had a run on the bank there would not be enough cash to make good on a guarantee anyway.. most TK outfits the owners do fine but they are not sitting on millions of liquidity.  Some are but not the majority.

And yes there is TOO much money in the Bay Area we all know that :)  why else would all the turn key guys market and hammer on Bay Area and LA investors.. they know that's were the money is !!

I suspect others doing PPM type deals like your doing that are closely held would offer the buy back.. although I suspect that may be selling a security and have some security issues associated with that buy back provision.. maybe not but... I seem to think in the back of my mind if your guaranteeing performance etc there is another level of security docs you must do and probably also have monster reserves to allow for this.  Again maybe I am wrong.

AS for singling out turn key providers I can assure you there are good one's in each market not just two in the US... but there are also bad one's in each market... one just needs to be careful.

did you buy another apartment building there in the bay area ?  what is your new fund investing in.. And I did not think they let engineers do this sort of thing !!

I could see some policy like if you are unhappy with the investment we will assist you in selling your investment for a small flat fee. There should be enough demand in what you are selling to do that. Not a traditional 100% money back guarantee but it should come close or more in most cases. 

@Mike D'Arrigo

 Thanks for your comment. I absolutely agree, if I instruct a stockbroker to buy shares and they do not perform, I cannot expect the stockbroker to refund me. However, what if the stockbroker deliberately provided inaccurate information? Do I have options, you bet! What options do  have if a TK provider did not provide me with accurate and honest info...? Is asking for a buyback if information provided is deemed inaccurate unreasonable...?

Originally posted by @Curt Davis :

this is probably one of the silliest post topics as this is all subjective to personal opinion.  How would you even gauge such a list?  Do you base it on number of sales per year, size of the company, number of satisfied clients, how much you sell a home for,etc........ 

There is really only one TK company that most likely comes to everyone's mind.  The rest are small potatoes. 

Hey mate,

Even us small fish eventually get bigger lol

Quote from this guy @Chris Clothier - "You won't be small fish for long if you keep getting better every day! Getting better every day is the best way to get bigger!"

Thanks

@Matt R.

  I hear the thought process.. but the reality is after a year its no longer a brand new turn key.. So said turn key operator would have a hard time reselling.. Plus many use outside marketing companies ( there are many trolling BP and as you know ) said fee's are generally 4 to 10k per sale with an average right about 6k or so... Along with just try to get good marketing pictures once the tenants have all their belongings strewn about.. Also tenants if they know the property is for sale sometimes will bail as they are afraid of change.  And they don't want people coming through the house etc.  Those were all things I experienced and learned the hard way.

And how do you define unhappy. you see it here on BP all the time those totally inexperienced RE investors with completely unrealistic expectations. And TK being what it is many of these are sold to Very first time rental property owners.. Does not take much for these folks to panic and want their money back for some small issue that a more experienced owner would know is par for the course.

My model I did a few years ago and bought 350 of these was the closest thing a out of area investor could get to consistent cash flow with no interruption and no bad days.  And I was proud of it...