Turnkey rentals

14 Replies

It's been a while since I have been on BP. Last time I posted I got a lot of good feedback, and have put it to good use. We have increased the number of our rental properties from 5 to 8 over the last year using our self-directed IRA. It's been a good experience so far. We still have properties in Colorado, Florida, and Missouri. We are now considering selling one of our properties in Colorado where we have had really good appreciation, and want to buy another property with a little better return somewhere else. We are considering a turnkey operation to help us find another property. We started looking into this a little last June, but ended buying more rental properties on our own instead. It's a little daunting to think about putting a lot of faith and $$$ into someone else's hands. Does anyone have any experience with purchasing a turnkey rental... i.e., condition of the property, good locations, renters, property managers, ROI vs. higher cost of property, long term returns, reputable turnkey companies, etc.?

I'd really appreciate your input!

I actually helped out of area investors with turnkey rentals in my home market of Scranton PA, so I can answer any questions on how to turn keys work for you, as they may  more or less work same way nationwide.

@Lori Beard tomes have been written on that topic here in the forums as well as on the member blogs. Use the search feature in the upper right hand corner to start your quest. Post back with specific questions and folks will jump in and lend their insight.

Thanks Bill S.!  I will follow up on the blogs, and try to come back with specifics!

Hi!  Feel free to pm me or call me & maybe I can help you on your fears:0  Investing in out of state real estate can be daunting....all the numbers, however, if you find a person who takes time to assist you, it is not that hard.

I try to help everyone I talk to, whether they purchase from me & the company I work with or from someone else.

Education, patience, asking questions makes this process so much easier!

Good luck!

Hey Lori! I've always bought turnkeys for myself, so happy to help in any way I can.

Out of curiosity though, why are you thinking about turnkeys if you are used to doing them yourself? Certainly nothing wrong with it and it can open up a lot of opportunities, but usually people who have the know-how to do it on their own aren't as much interested in the turnkeys (I happen to *not* be one of those people who know how to do it on my own, lol).

Any any particular markets of interest?

Disclosure: I proved turnkey service

Lot's of turnkey folks on the site in all of the low barrier to entry markets. I would set up a keyword alert for turnkey and watch your inbox fill up with discussion after discussion about the topic. 

Good luck whichever way it turns out.

Originally posted by @Lori Beard :

It's been a while since I have been on BP. Last time I posted I got a lot of good feedback, and have put it to good use. We have increased the number of our rental properties from 5 to 8 over the last year using our self-directed IRA. It's been a good experience so far. We still have properties in Colorado, Florida, and Missouri. We are now considering selling one of our properties in Colorado where we have had really good appreciation, and want to buy another property with a little better return somewhere else. We are considering a turnkey operation to help us find another property. We started looking into this a little last June, but ended buying more rental properties on our own instead. It's a little daunting to think about putting a lot of faith and $$$ into someone else's hands. Does anyone have any experience with purchasing a turnkey rental... i.e., condition of the property, good locations, renters, property managers, ROI vs. higher cost of property, long term returns, reputable turnkey companies, etc.?

I'd really appreciate your input!

Disclosure: I am a Turnkey Provider 

 Hi Lori-

That is phenomenal, sounds like you are well on your way to having a sizable rental property portfolio. Turnkey is an excellent method to invest in Real Estate, it is important to understand your goals and strategy, then drill down the true meaning of turnkey for you, we can begin with:

"Turnkey in simple terms means - a completed product or service that is ready for immediate use. But in real estate, Turnkey is more of a process which includes the purchase, renovation or rehabbing of an existing property, the leasing and then the sale of the property. So in other words all the hard and time consuming tasks are already done and the property is cash flowing from day one".

It is very important you do not just invest on faith, learn the area, the team you intend on working with, really drilling down if the boutique supplier is offering you value for your strategy.

I think you re asking the right questions, looking at the BP marketplace is a good way to begin your research and drilling down a solution that aligns with your goals.

Turnkey comes in different flavors, ultimatley it is suppose to be a simple entry in RE without having to construct your own infrastructure, for good passive investment cash-flow.

Main takeaways: Turnkey comes in different flavors:

  • Simple Passive Income - the Turnkey home is direct purchase from the supplier, it is operational and managed by them
  • Streamline construction and uniformity materials for maximum economies of scale
  • Research the area, visit the space possibly, meet the team

I hope this helps you a little bit more as you try to define the type of culture you seek to align yourself with. Whatever the space, you need to make sure it aligns with your strategy, your plan, offers a hands free transparent relationship,that is going to be long-term and mutually beneficial. A good turnkey provider manages investor ROI not only the asset itself.

Hi Karen!  I think we are really looking for a company that provides the provides the updates/remodeling to the property as needed, the renter and the property management on a turnkey rental. We haven't narrowed a location yet. Colorado is very expensive, the insurance in Florida is also very expensive, and we are hesitant to purchase more properties in the area of Missouri where we already have rentals for a variety of reasons. The reason we bought in these areas before is because we already knew realtors, property managers, and contractors in the areas. We really don't want to have to build all of these contacts in a new area which is why we are looking at turnkey. We tried to connect with a property manager and realtor in Kansas City, MO, but the property manager really dropped the ball. So we are now a little leery, and looking for recommendations.

Hi Ali!  Thanks for responding.  When you buy turnkeys do you look for a company that does the reno, finds the renter, and manages the property?  I think that is what we are really looking for.

We bought our other rental properties in areas we were familiar with, and knew the realtors, property managers, and contractors, so we felt comfortable with them.  We did try to set up connections with a property manager/contractor, and realtor in Kansas City, MO, but the property manager really dropped the ball on a property we were prepared to buy.  She made a lot of promises, and then just disappeared.  So now we are looking at turnkeys.  We haven't settled on a market yet, but are looking at the midwest primarily.

Good Morning Lori!

I'm just chiming in because it always makes me sad to hear people have had disappointing experiences in KC.  Like any another city, we've got some bad apples but, in general, we have a great bank of Real Estate resources!

Hi @Lori Beard ,

I work with a Turnkey Provider and, from our experience, the two best ways to secure your investment is by purchasing a property from a company that only manages properties they have personally repaired. Any turnkey provider can fix a house and sell it "turnkey" but the less reliable companies will never manage their own tenants or their own repair work.

Similarly, property management companies that know both (1) the condition and history of the property, and (2) know the tenant is the best type available, will have the best return on time and money.

We can PM if you'd like further details, I don't intend to hijack the thread :)

Lori,

We've got some rentals in KC. Got them through Invest1Financial in Denver area as turnkey investments as part of a 1031 exchange about three years ago. We really like working with Travis and have had good returns with these rentals. He set us up with Kansas City Management Solutions for property management and they have done a good job for us. The KC market, as you know, is totally different than Colorado. Would be glad to respond to email if you have questions.

Bob

Hi Bob

We are looking at Rental turn key properties in Kansas. Could you provide a reliable resource to talk to and start investing in Rental real Estate

Thanks

kiran 

Originally posted by @Nathan Platter:

Hi @Lori Beard ,

I work with a Turnkey Provider and, from our experience, the two best ways to secure your investment is by purchasing a property from a company that only manages properties they have personally repaired. Any turnkey provider can fix a house and sell it "turnkey" but the less reliable companies will never manage their own tenants or their own repair work.

Similarly, property management companies that know both (1) the condition and history of the property, and (2) know the tenant is the best type available, will have the best return on time and money.

We can PM if you'd like further details, I don't intend to hijack the thread :)

You can't really generalize. There are pro's and con's of both and either way can work when done right. We've sold turn key properties with in house property management and with outsourced management. It comes down to the quality of the people you are working with. There's an automatic assumption that in house is best, but just because someone can do good rehabs, doesn't mean they are good property managers. Property management is a learned skill. I'm a believer in working with "best of breed" and if that happens Iwith at all comes down to who does the best job. Good rehabbers that don't do in house management will generally have a close relationship a PM that they do a high volume of business with and who know the rehabbers quality and standards. Either way can work if the PM is screened well.

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