Turnkey investment companies

33 Replies

Just learned about turnkey investment companies like Roofstock. I was curious if anyone has worked with them; Any horror stories or is it a legit way to invest? I ask because it sounds like it could be a good option for out-of-state rental property investing.

Originally posted by @David Mills :

Just learned about turnkey investment companies like Roofstock. I was curious if anyone has worked with them; Any horror stories or is it a legit way to invest? I ask because it sounds like it could be a good option for out-of-state rental property investing.

 Turnkey is a GREAT way to get started with investing or to invest OOS. FYI, Roofstock isn't really Turnkey, they are just a marketplace for properties (think Amazon.) 

a Turnkey Investment normally comes from a provider. The provider should first OWN the property (not be a listing) hen when they own it they should totally renovate it, and place a tenant. After they sell the property to you, they should stay on as the property manager and NOT push you off onto some third party manager you have never heard of. 

Just research the companies in the markets you like and you should be good to start. Always get a home inspection and appraisal!

Try looking at:

5 Keys to Turnkey Real Estate Investing


Assessing the Risk of a Turnkey Real Estate Company

@David Mills  

At the end of the day, Roofstock and other TK companies are shortcuts to buying and renovating properties. It does not eliminate the need to do your own due diligence - inspection, appraisal, etc. It is really important that you visit any market you are interested in, look at some sample properties and streets firsthand, and do a deep due diligence on the property management company, because it is their ability to put a good tenant in place and collect rent that makes or breaks your investment, and there are no guarantees.

Shortcuts can be helpful, and a big time saver, but you have to be very careful when doing so.

You'll find plenty of info on them if you search the forums...

Good luck!

Promotion
Obie Insurance
Coverage for your rental
Get a quote for your rental property in 2 minutes or less.
Save on landlord insurance. A transparent, simple, and affordable way to protect your investment.
Start Saving

@David Mills absolutely.  If you're considering out-of-state investing, then turnkey is definitely an option to explore.

As others have said, you still want to make sure you know the market you're investing in. Do the due diligence yourself on the city, neighborhoods, schools, crime statistics, etc, and know where you do and do not want to own rental property.  Also, I recommend going with a turnkey provider that sets you up with Leasing and Property Management.  Some turnkey companies will sell you the house, and then simply put you in contact with their recommended Leasing and PM companies. That's fine.  However, others actually have in-house leasing and property management (which I recommend), so that its already in place when you purchase and they are already working to get your property leased.  

You may want to check out "Turnkey Revolution" by Chris Clothier of MemphisInvest.

@David Mills  First, welcome to BP! Not sure if you've already begun your real estate investing journey, but if not, congrats on taking the first steps!

The best advice I can give you is RESEARCH, RESEARCH, RESEARCH!

There are a ton of turnkey companies in markets all across the country, and not all are going to accomplish your goals or offer the same benefits. Roofstock is driven by an algorithm that can be debated as to its true success. But, they don't manage the property. It's also a mixed bag of properties and you don't really know what repairs could be on the horizon.

It really all starts with you and your goals. What are you looking to achieve? What markets are you interested in? What is your available capital? What is your strategy? Some like Cash Flow, some buy for the appreciation. Each market can offer something unique that speaks to your strategy.

Then you have to find a company that meets those goals and find out what they offer you in return. Some will guarantee the rent/maintenance as part of their management of your properties. Some do higher-end renovations to address major capital expense items. Some are in lesser-quality neighborhoods which impacts your potential vacancy, maintenance on the property, and overall quality of the tenant.

The great news is, you have the leverage in these conversations, so take your time to find the best one for you!

Let me know if you have any questions! I'm more than happy to help!

@Forest Skufca thank you! Yes I am just starting out. First I’m paying off debt and learning as much as I can before I start investing. My goal is $10,000 in cash flow per month. If roof stock doesn’t provide in house property management, do you which turnkey companies do offer in house property management?

Not a fan of turnkey properties. Search whatever company you are thinking about investing with into google with "bigger pockets" after it. The search function on here isn't that good and almost all of them have been reviewed by other investors.

@Chris Coleman I wouldn't trust that vetting outright, though. Same with their other "certifications." There are too many horror stories on BP about that. That doesn't mean avoid Roofstock properties, they can be treated like any other, but don't put much stock in what Roofstock says about the properties or their PMs.

Originally posted by @David Mills :

@Forest Skufca thank you! Yes I am just starting out. First I’m paying off debt and learning as much as I can before I start investing. My goal is $10,000 in cash flow per month. If roof stock doesn’t provide in house property management, do you which turnkey companies do offer in house property management?


You're welcome! Paying off debts is a great first move, and $10k/month is a powerful goal! I love that you already have a number to attain. Now it's all about how to get there!

I can't speak for other turnkey companies, but, I do know that a great company should do these four things: They should acquire the property themselves (vs brokering the sale), they should renovate the property to address potential capital expenses, they should manage the property, and they should provide in-house support to you as the client. These are all things we do.

As you can see, I work for a turnkey company, but I believe helping people achieve their goals is more important than saying "Ours is the best and only one offering these services." There are tons of great companies available that do these four things. It's the details of how they do each of these four things that separate the good companies from the great companies.

I would simply encourage you to reach out to several and see what they have to offer, and I would love the opportunity to be one of those companies. If we aren't the right fit, that's fine! At least I've been able to help you get closer to achieving your goals.

Feel free to send me a PM so we can talk further!

Promotion
BAM Capital
Multifamily Syndicator
Targeted 10% Monthly Returns | Passive Income
Backed by institutional-grade apartments, strong sponsor track record, $700M AUM, over 5,000 units
Learn More

Any Turnkey Provider should do the management in-house. Pushing you off on some other company basically just means they are RE agents who want to make a deal. If they do the management in-house then they know a relationship is what needs to be formed, not just a sale! 

Also, I believe Roofstock is just a marketplace. They don't actually do the renovations or management.

Originally posted by @Tom Ott :Also, I believe Roofstock is just a marketplace. They don't actually do the renovations or management.

 +1 to that statement exactly, it's just a marketplace that happens to be geared toward investors vs. buy and live there shoppers. Also props to @Tom here for keeping up with all my emailed questions about Smartland's turnkeys lately. 

Originally posted by @David Mills :

Just learned about turnkey investment companies like Roofstock. I was curious if anyone has worked with them; Any horror stories or is it a legit way to invest? I ask because it sounds like it could be a good option for out-of-state rental property investing.

 Roofstock is an online marketplace so it's not going to have a positive or negative effect on the property you purchase. Those are all handled by 3rd parties. Roofstock is more or less like a Zillow or a Loopnet.

@David Mills

I bought two last year from MemphisInvest and had a fantastic experience. I think turnkeys are a great way to start. You’ll need to do all your own due diligence of course. For me it was a great way to ease into real estate investing.