Turn Key Rental Buyers- Birmingham, AL

3 Replies

I have several questions for investors buying turn key properties (specifically in Birmingham, AL). My company does about a 50/50 split between wholesale properties and turn key rentals. We own 45 rentals in Birmingham and all are located within a 3 mile radius of our office. We know the value of having a long term tenant, and also the value of having few repair and maintenance issues. 

1) What is more important- a long term tenant or a recently rehabbed home. For example, we have recently purchased a property with a tenant who has been in place for 8+ years. Section 8 pays most of her rent and she does not want to move. We have done some exterior upgrades to the property (painted exterior, replaces a few pieces of rotten wood, demolished an old building), but the inside has not been "updated" for several years. The inside of the property is neat and clean but it's lived in. Would this type of property be attractive for a Turn Key Buyer? Since the tenant has been in place for so long, as a landlord I would love this property. However, if the tenant moved we would need to paint interior, replace carpet, and do general maintenance and repairs. 

Compare this to a property in which we bought vacant and did a complete interior and exterior rehab, but the tenant is qualified but not established. 

Any and all feedback on this is very much appreciated. 


Often we would want to do a home inspection and when the report is generated with the estimate, typically we would request a credit off the price for those future repairs. Buy it in its current condition and if and when tenant vacates, we have a rainy day fund to make those repairs without it coming out of our deferred maintenance reserves.

Thanks for the reply @Jonathan Mednick . I didn't realize that you bought turn keys. What areas do you buy in?

Let me expand on my question... Even on a property that has been rehabbed before the tenants move in, it will still usually need paint and carpet when the tenant vacates. My point is that any time a tenant moves out there are going to be deferred maintenance repairs. From my experience I would much rather have a property that is in good condition with a long term tenant than a newly rehabbed property with a brand new tenant. We screen our tenants extensively, but having a proven tenant that has been there a while (and takes care of the place) is a very comforting feeling. 

We have "wholesaled" several of these houses in Birmingham with long term tenants and our clients have been very pleased with them. The key is to be very up front with the buyers on exactly what they are getting. We even have third party inspections in case there is anything we miss. 


Certainly there are investors who want newly renovated properties with new tenants from a turnkey provider. Many of these investors after 1-2 years want to maximize their returns and re-capitalize by selling the property as a turnkey. With a stable rent roll and most deferred maintenance at a minimum, these properties are just as in demand as a newly renovated turnkey property with a new tenant. Obviously, investors buying these "existing" turnkey properties would want to use their deferred maintenance to cover costs of paint and carpet replacement once the tenants move out.

The biggest mistake with an investor purchasing a turnkey property is removed the 8-10% deferred maintenance from the monthly rent since they assume there will be none if they bought the property from a reputable turnkey provider. We always tell the investors that you want to keep the deferred maintenance as part of the monthly costs to be used when a tenant inevitably vacates, whether 2 years or five years.

If you are honest up front about the minimal repairs required, you should be fine. Most of it should be cosmetic. Most of the time, turnkey buyer will back out if there is trouble with the HVAC, roof, plumbing or electrical or request a credit for the amount at closing. Often it is the turnkey seller that can not justify the additional credit at closing to make their numbers work is when the deal dies.