Closing costs on a turnkey

10 Replies

Hey everyone, So I was wondering whats the prototcol for closing costs when it comes to turnkey?  When I bought my primary a few years ago I negotiated  closing costs and came very little out of pocket. 

Now with my turnkey getting closer to closing I find that Im supposed to pay for all closing... also, does a turnkey company real estate agent work as a dual agent for the buying/selling of property?

Thanks in advance

@Rob Z.

Yes the TK agent acts as duel agent.  

If your are doing conventional financing the most allowed a seller can provide for assistance on closing is 2% of the sale price towards your closing but you need to negotiate that on the front end.  It would be considered UN-professional to go to the seller now and ask for closing assistance.   Chalk it up to a learning experinence and now you know for the next time.

Good luck!!!

Hello both,  I am super new to this and I was wondering what term "Turn Key" means here?  I alway thought it meant a property that was ready to move in without any need for any updates or repairs.  But here it seems to mean something like a rental property or other investment that isn't being lived in by the owner?  Sorry for my ignorance!  

Greg

@Greg Eck

"Turnkey" is a term used rather loosely and can mean different things coming from different providers.  As a turnkey investor myself, the standard I like to see is this:

Property is purchased, fully renovated (no differed maintenance), has a tenant in place, and ongoing property management (very important that they be really good PM) from the day I own it.   Thus it cash flows from day one.

@Greg Eck  

 @Larry Fried  defined the most common definition. Turnkey providers will often offer discounts to investors who pay cash up front to fund the rehab and will also call it turnkey because they are still doing the work of sourcing, managing the rehab, and placing a tenant, as opposed to the more common DIY method on BP where the investor does all those things

Originally posted by @Mark Shaffar :

@Greg Eck  

 @Larry Fried defined the most common definition. Turnkey providers will often offer discounts to investors who pay cash up front to fund the rehab and will also call it turnkey because they are still doing the work of sourcing, managing the rehab, and placing a tenant, as opposed to the more common DIY method on BP where the investor does all those things

There are also "turnkey" providers that end up somewhere in between these two ends of the spectrum.

When potential buyers see these turnkey props , is there usually wiggle room in the price?  I know everyone loves to haggle but with tk is it a different story?

Originally posted by @Rob Z. :

When potential buyers see these turnkey props , is there usually wiggle room in the price?  I know everyone loves to haggle but with tk is it a different story?

 It depends on the turnkey provider, but most often the demand is high enough that there is little or no wiggle room, unless there the properties are overpriced to begin with.  Cash buyers or buyers of multiple properties from the same company have the most leverage, and can often get some discounts.

As others have said the spectrum for what "turnkey" is can be very loose.

Every company is going to operate a little differently. The best thing to do is ask.