My Turnkey Portfolio

My Turnkey Portfolio

Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes

Hey All - I wander around and rarely post on here, but thought I would share my real Real Estate returns for my turnkey portfolio. I get asked a bunch of questions about Turnkey and would be more than willing to answer any Qs about specific TK companies via message, but trying to avoid recommending anyone via the forums.

I owned 4 TK properties for the entire year of 2016. They were all 70-75% LTV and had the following returns:

16%
19%
23%
11%

I owned 2 TK properties that I had for 11 months out of the year, and the returns looked like this:

-15%
24%

Yes, that is a negative. I've learned a lot over the past couple of years in terms of providers, what to look for/not to look for, how to do proper due diligence, etc. Most importantly, I've learned that turnkey is an illusion. The idea of paying market for a house that is tenanted and assuming it's as easy as getting a check every month isn't the case. The idea that it is ready to go and no work is needed is also not always the case. If anybody is searching tk, please ask away!

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Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
9y
Originally posted by @Lance Robinson:

Hey All - I wander around and rarely post on here, but thought I would share my real Real Estate returns for my turnkey portfolio. I get asked a bunch of questions about Turnkey and would be more than willing to answer any Qs about specific TK companies via message, but trying to avoid recommending anyone via the forums.

I owned 4 TK properties for the entire year of 2016. They were all 70-75% LTV and had the following returns:

16%
19%
23%
11%

I owned 2 TK properties that I had for 11 months out of the year, and the returns looked like this:

-15%
24%

Yes, that is a negative. I've learned a lot over the past couple of years in terms of providers, what to look for/not to look for, how to do proper due diligence, etc. Most importantly, I've learned that turnkey is an illusion. The idea of paying market for a house that is tenanted and assuming it's as easy as getting a check every month isn't the case. The idea that it is ready to go and no work is needed is also not always the case. If anybody is searching tk, please ask away!

Seems like things are going strong! Keep it up! Turnkey can be very profitable for many. Turnkeys are not an issue for others. Many times it depends on the market and the provider. Ideally, you want a provider who has already done the rehab and currently owns the home. There NEEDS to be a tenant in place or it is not a true turnkey. If the home was done correctly there should not be any maintenance issues. It should be like investing the stock market....money in...money out.

See this reply in the discussion

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  • Investor · WI OH · Member since 2015 · 113 posts · 36 votes
    9y

    @Lance Robinson

    Willing to expand on the 15% issues?

  • Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes
    9y
    Originally posted by @TJ P.:

    @Lance Robinson

    Willing to expand on the 15% issues?

     Hey TJ - Sorry for the delay. I've worked with 5 different turnkey providers now (I have or have had some other properties as well) and have to say that who you work with and the feet on the street are really the most important. This property being turnkey was an illusion. It had a bunch of issues from day one. It wasn't tenanted, then it had everything from a bad HVAC, to a hole in the roof, to just repairs and odds and ends left and right. I trusted the home inspector that they set me up with, and they did a crummy job obviously. (Not worth the lawsuit to spend good money after bad). Then the property took a couple months to rent out, ended up having to be section 8, for $100 less per month than expected. All the way around, the illusion of a fully rehabbed property with a good tenant in it in exchange for market value was just that, an illusion. More due diligence should have been done on my end, and I can guarantee something like this will never happen to me again. I also know who I do and do not trust now going forward. I hope that helps, let me know if you have any other Qs.

  • Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    9y
    Originally posted by @Lance Robinson:

    Hey All - I wander around and rarely post on here, but thought I would share my real Real Estate returns for my turnkey portfolio. I get asked a bunch of questions about Turnkey and would be more than willing to answer any Qs about specific TK companies via message, but trying to avoid recommending anyone via the forums.

    I owned 4 TK properties for the entire year of 2016. They were all 70-75% LTV and had the following returns:

    16%
    19%
    23%
    11%

    I owned 2 TK properties that I had for 11 months out of the year, and the returns looked like this:

    -15%
    24%

    Yes, that is a negative. I've learned a lot over the past couple of years in terms of providers, what to look for/not to look for, how to do proper due diligence, etc. Most importantly, I've learned that turnkey is an illusion. The idea of paying market for a house that is tenanted and assuming it's as easy as getting a check every month isn't the case. The idea that it is ready to go and no work is needed is also not always the case. If anybody is searching tk, please ask away!

    Seems like things are going strong! Keep it up! Turnkey can be very profitable for many. Turnkeys are not an issue for others. Many times it depends on the market and the provider. Ideally, you want a provider who has already done the rehab and currently owns the home. There NEEDS to be a tenant in place or it is not a true turnkey. If the home was done correctly there should not be any maintenance issues. It should be like investing the stock market....money in...money out.

  • Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes
    9y

    @Tom Ott Agreed, that's why when you find someone you like working with, stick with them until you have a reason otherwise! It's hard to find the good ones. : )

  • San Jose, CA · Member since 2017 · 14 posts · 3 votes
    9y
    Great insight here as I am looking into turnkey myself. From having multiple conversations with different providers I agree that it is more important who you align yourself with more than anything
  • Rental Property Investor · Petaluma, CA · Member since 2015 · 151 posts · 143 votes
    8y

    @Lance Robinson any updates? Still holding these turnkeys? Buy anymore?

  • Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes
    8y
    Originally posted by @Noel R.:

    @Lance Robinson any updates? Still holding these turnkeys? Buy anymore?

     Hey Noel - I posted an updated thread here: 

    https://www.biggerpockets.com/forums/522/topics/52...

  • Investor · Charlotte, NC · Member since 2021 · 42 posts · 18 votes
    5y

    @Lance Robinson I don’t see any returns posted on this message but the verbiage indicates it was not the return you were seeking. I’m going to message you to get specifics on the good the bad and the ugly

  • Investor · Scottsdale, AZ · Member since 2015 · 130 posts · 102 votes
    4y

    @Joseph Brown We side messaged, but the one property that was underperforming is what I was referring to. I sold that. onea few years ago and kept the winners.

    I'm selling 2 of my properties in Indy now if anyone is interested in checking them out on the marketplace:

    https://www.biggerpockets.com/real-estate-listings/indy-premium-turnkey-sfr-for-sale

    https://www.biggerpockets.com/real-estate-listings/indy-premium-turnkey-sfr-for-sale-2

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