to turnkey or not to turnkey

[Michael Arreola]

hello bp

So I am a new investor who is working on my cash position right now. I should be in a "comfortable" cash position early next year. My question is should my first property be a turnkey? I understand that I won't be getting the best COC return as if I were to find my own deal but I just really want to get started. I live in northern California so to get a buy and hold property will be a lot harder than some other markets. I also understand that I should do my due diligence before purchasing a property from turnkey providers. What are some of the benefits that you guys have seen from turnkey and even some of the negative things? Any advice or recommendations would be appreciated. Happy investing.

Thank you!

Michael Arreola

[Todd Dexheimer]

2 extremely important things to think about if you're going turn key. First is the turnkey company. Make sure you do a lot of research on the company and get a ton of referrals. I would make sure you're able to get conversations with the management team and with the owner of the company. I would also make sure  that you talk with numerous investors about the company. Bigger pockets is a great source once you find a company. 

 Next I would do a lot of research on the market itself. If you're going to invest in the Midwest where a lot of turnkey properties are located you need to be sure that the population is growing or at least stable and not projected to decline. You also need to understand the exact location that you are investing in. The last thing you want to do is buy turnkey properties in a poor location with a poor turnkey company.

The last thing – I guess third is that you want to make sure that the property you are purchasing is sellable in the future. I would avoid weird houses with odd layouts or features that just are not going to be desirable.