Turnkey Providers - Observation/Limitations and Successful Exits

[Manish A.]

Hello Experts,

I am doing REI for the last 3+ years and analyzed many offerings from different turnkey providers and noticed the following:

1) Providers are selling properties above market value; charging a premium ($10-$15k more)
2) Neighborhoods are at most B- or C or D
3) Numbers are not really working; -ve cash flow or less than $100 cash flow if you add 5% vacancy + 5% maintenance. Also, they do not take into account any "capital" expenses, but we all know those things can happen
4) Property Tax and Insurance numbers are less in their proformas than we need to pay
5) For some providers, appraisals are coming lower than the selling price

Considering the above factors, I like to know -

a) Are you able to find a property in the good neighborhoods and numbers are working with at least $200 cash flow?
b) Has anyone able to exit (i.e., sold the property without any loss) after buying a property from a "turnkey" provider?

* Note: Most of the number crunching were done for properties in TX (Houston & Dallas) and FL (Jacksonville)...

Thanks in advance for sharing your experience(s)!

~MA

[Lee S.]

I think their plan is to sell the homes to people that don't do the math the way you just did.