Starting Turnkey venture, need tips!

Starting Turnkey venture, need tips!

Member since 2018 · 103 posts · 48 votes

Good morning BP!

I'm in search of some tips trick or just general advice from people with turnkey experience (whether it be from a provider or consumer). Let me lay the foundation before I go any further.

I'll be operating in the Midwest C-B properties from OOS(Cleveland, St Louis, Birmingham etc.) The goal is do buy cosmetically distressed 3/1 SFH. There will be light to moderate reno's on each unit and every unit will be rented out before sold(PM will be handled by smaller PM's and not in house) and I will be incurring the costs of renting the units out so we can truly be turnkey. Sales prices will obviously differ based on multiple factors but were aiming for each project to retail between 70-110. Aiming for 15-25% margins and unit that are bought with mortgages will have ROI's between 15-20%.

Does anyone have any input, tips tricks or just general advice/thoughts?

Finding realtors for 20-40k properties is obviously tough. I've been writing offers on properties where the numbers will work with our goal but have so far been unsuccessful. I do have a PM lined up as well as contractor in our main market as of now but getting contractors to walk these projects where the total bill is 10-20k has been tough. I'm plugged into some wholesale providers but I'm a bit hesitant to use one until we at least get our first deal done.

Thanks in advance!

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Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Charles Mitchell:

Good morning BP!

I'm in search of some tips trick or just general advice from people with turnkey experience (whether it be from a provider or consumer). Let me lay the foundation before I go any further.

I'll be operating in the Midwest C-B properties from OOS(Cleveland, St Louis, Birmingham etc.) The goal is do buy cosmetically distressed 3/1 SFH. There will be light to moderate reno's on each unit and every unit will be rented out before sold(PM will be handled by smaller PM's and not in house) and I will be incurring the costs of renting the units out so we can truly be turnkey. Sales prices will obviously differ based on multiple factors but were aiming for each project to retail between 70-110. Aiming for 15-25% margins and unit that are bought with mortgages will have ROI's between 15-20%.

Does anyone have any input, tips tricks or just general advice/thoughts?

Finding realtors for 20-40k properties is obviously tough. I've been writing offers on properties where the numbers will work with our goal but have so far been unsuccessful. I do have a PM lined up as well as contractor in our main market as of now but getting contractors to walk these projects where the total bill is 10-20k has been tough. I'm plugged into some wholesale providers but I'm a bit hesitant to use one until we at least get our first deal done.

Thanks in advance!

 I suggest getting your footing in 1 market before attempting to expand into multiple markets. I spent years & millions in Cleveland alone building up my infrastructure & downstream businesses before ever looking to do anything further out. If you go brand new into 3 new markets all at once & have to rely on other agents for everything what value proposition do you really have to offer to clients?

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  • Rental Property Investor · Orange County, CA · Member since 2016 · 740 posts · 529 votes
    7y

    @Charles Mitchell Ah gotcha- you want to start a turnkey company? That is lofty and not passive, got it now! I have my own portfolio I am building and basically hired a team locally to help me because I live in CA and can’t do it myself out of state. I think you need someone local you can trust, I’ve met this team over the years and finally making sense of it and working now with all the people in place. They finally brought in a hard money lender which makes this program faster. Feel free to message me. Happy to share what I’m doing personally. 

  • Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    Cleveland already has McDonalds (Wise) and Burger King (Smartland) what are you going to do thats better so people will want CM Burgers?

     I guess I can be thankful for being mentioned here, even if it as Burger King. You like what you like I guess. :)

  • Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    7y

    I would have to agree with the rest here. Now would be a difficult time to start if you don't have the support ready to go. How would you manage them? Turnkey providers buy, renovate, sell, and manage all in-house. You can't just sell them a property and push them off on a random PM, that wouldn't be a True Turnkey. It needs to be all in-house under one roof. 

    Now, if you are planning on just flipping than there is plenty of room in the Cleveland market to do so! 

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