Turnkey Real Estate Investing

6 Replies

So, I've been giving serious consideration to buying a few properties with a turnkey provider.  I'm busy, and my local area isn't the best place to get started.  I know that there are downsides, not all companies are reputable, and I could make more of a return if I did it myself.  But, I want to keep all options on the table.  Does anyone have any advice, experience, horror stories to share?  Does anyone know of any companies out there that are reputable and won't scam me?  Thanks

for negative stories read any of the Morris/ oceanpointe threads that will give you a good idea how not to buy a home out of state.

but from my perspective you have some good Opps right there were you live..

@Brian Lesko Do a search for "turnkey" on BP and you will find an overwhelming amount of data and stories about turnkey experiences.  The good, the bad, and the really ugly (like Morris Invest).  Just know, that doing turnkey successfully depends a lot on the who you choose to work with, and the kind of vetting you do to get to your choice.

Originally posted by @Brian Lesko :

So, I've been giving serious consideration to buying a few properties with a turnkey provider.  I'm busy, and my local area isn't the best place to get started.  I know that there are downsides, not all companies are reputable, and I could make more of a return if I did it myself.  But, I want to keep all options on the table.  Does anyone have any advice, experience, horror stories to share?  Does anyone know of any companies out there that are reputable and won't scam me?  Thanks

Turnkey investing can be great when you live OOS! The Midwest seems to be pretty popular right now as many of the markets there are still very affordable. Just make sure that whatever provider you start looking into owns, renovates, and manages their property in-house. They should not just be listing the property on the MLS nor should they just push you off on some management company after the sale!

I would suggest looking at:

The Best Types of Markets for Profitable Turnkey Properties

and

What to Ask When Working With a Turnkey Provider

Sure, I can give advice and experience... Fortunately I can't give personal horror stories (I know of a couple second-hand ones). But plenty of lessons learned. Those primarily have been in the initial due diligence period and then with the property management. Nothing dire, but definite lessons learned. I've had my turnkeys since 2011-2012, and also been around turnkey world ever since then with other buyers. Happy to share resources and war stories and such. Message anytime!

Originally posted by @Brian Lesko :

So, I've been giving serious consideration to buying a few properties with a turnkey provider.  I'm busy, and my local area isn't the best place to get started.  I know that there are downsides, not all companies are reputable, and I could make more of a return if I did it myself.  But, I want to keep all options on the table.  Does anyone have any advice, experience, horror stories to share?  Does anyone know of any companies out there that are reputable and won't scam me?  Thanks

 Tons of folks are investing out of state. I recommend you setup a keyword alert here on Bigger Pockets for the word turnkey. It's probably one of the most widely discussed topics here on the site. As for why folks are investing out of state most do so for 1 of 2 reasons.

  1. They are living in a market they are priced out of and look to Midwestern cities for lower entry prices.
  2. They do not have the time, ability &/or desire to be an active operator in the business of rental real estate. Instead they won't an easy & safe way to park their money.

You probably don't have either of those issues as you live in PA so I would suggest you look to a local PM or turnkey provider as you'll likely know the market better. However if you are determined to go out of state the main thing you (or anyone) considering investing out of state (especially as a novice or beginner) is that it's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

As for horror stories you'll end up involved in those no matter where you invest. Tenants can be tough. The lower quality the asset the tougher the tenants are. I've seen it all when it comes to this business.

Below are some photos of my favorite horror stories that i've experienced in my real estate career.

If you are curious for some more tenant savagery there's tons more stuff like this on some of the following threads

TENANTS FROM HELL #3 Move outs from hell. PICS INCLUDED

TENANTS FROM HELL #2 Tubs & Showers from hell. PICS INCLUDED!

TENANTS FROM HELL #1 Deplorable living conditions. PICS INCLUDED!

If after going through all of those threads you are still up for it real estate investing is really an awesome business to be in. I love it & wouldn't trade this career for anything. Welp that's all I got for ya. Feel free to tag me with any follow up questions you have about the topic of investing out of state &/or turnkey.

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