Turnkey companies you can keep equity with?

Question

Corby Goade · Answer

I have a small turnkey model here in Boise, ID. We work with investors individually to identify properties that fit in their portfolio and assist in the acquisition, light rehab and management, but never take ownership of the properties. Our clients are in complete control and direct us every step of the way.

Marla B. · Answer

@Jay Hinrichs who are the reputable ones? I’m talking to one right now and I’m doing some diligence on them. Perhaps I can pm you a name and you can tell me if you know anything...

Rafael Correa · Answer

@Corby Goade I know it's an old thread, but are you still doing it?

James Wise · Answer

If you are looking to capture some equity you'll need to buy something off of the MLS & have a Property Manager manage it for you. To get equity you need to create value. You cannot create value in a property that is already been renovated. You create value for buying from distressed sellers with distressed assets. To pull this off the house doesn't need to be a total disaster either. Could be a bunch of stuff. Bad tenants or maybe a little old lady house, an estate, you name it.

Tom Ott · Answer

Maybe I don't know enough about the paperwork, but that doesn't seem too much like a Turnkey too me. Are you closing on a property that still needs work? So it will be vacant for months? if you leverage it, do they cover the mortgage payments and utilities? You really shouldn't close on a vacant property nor should you be in the negative if it is a Turnkey.

A True Turnkey should be completed and come with a tenant at closing. Maybe that is just what I am used to as I do not know much about this aspect of it.

Benjamin Mann · Answer

Hi Hank,

Im really sorry but I am only seeing this reply from you now and it was 6 months ago but thank you. How's the investing going? Are your properties through turnkey companies? Where abouts are you investing in Ohio? I spent 6 months in Lima during 12th grade.

Thanks again for you reply!

Hank Keller · Answer

Hi @Benjamin Mann - While all of the indianapolis turnkey properties i’ve Purchased over the past five years have been with a self directed IRA, i learned this past weekend while in Indy that you can participate in the rehab cost (after they purchase the property) with all cash and some financial qualification (not sure what it is as i’ve never pursued this method). The turnkey company owner also allows cash out refinance after the purchase. Having purchased 9 properties from them now, i can tell you that they have good rehab quality and encourage potential investors to visit them to meet the team and see their inventory.

I’ll also tell you that just like my 5 multi-family properties in ohio, i’ve Had maintenance issues and evictions and that they’ve done a good job on cost management and turn around time. Good companies are still out there, you just need to complete your due diligence to make sure they align with your strategy.

Ali Boone · Answer

It's definitely a thing, but you need to be very careful what company you do it with. Essentially all of the risk is on you, because it's your money and you own the property while they do the work, so who is doing the work is critical.

What market is this in? Or what company...if you don't mind sharing (can PM me too)

Ryan Dossey · Answer

In Indianapolis one of the big trends we've seen is that "equity" is given by completing a subpar rehab and cutting corners so the TK provider can still squeeze ever $ of profit out. My local "we buy houses" brand talks to hundreds of sellers a month and a LOT of them are from the west coast who quite frankly got hosed. If you must go the TK route I would fly out and view the asset, get the opinion of an unbiased BP member in the area (I do this all the time for folks looking at deals in Indy), and do a bit of research on the property. Neighborhood Scout is an AWESOME tool for viewing demographic data for neighborhoods. When I'm looking at buy and holds I analyze crime trends, employment, news, and attempt to graph if the property is going up, coming down, or staying the same. Looks can be extremely deceiving.

Jay Hinrichs · Answer

there are a few I know of.. and the reputable ones are far better than trying to do this yourself with unknown contractors etc.

Turnkey companies you can keep equity with?

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