Has Anyone Bought Turnkey Props from the following....
Investor · Los Angeles, CA · Member since 2019 · 17 posts · 9 votes
Has Anyone Bought Turnkey Props from the following....
Most Popular Reply
Lee RipmaPro Member
Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes@Lisa Gauff
I’ll just throw out a couple ideas - I know of a company in Kansas City with a cool alternative to TK key concept. You buy houses that the company master leases from you for a rent by the room model. The cash flow is higher, the property management is free, and you get to hold assets in A and B areas. My problem with TK companies has always been that you’re buying at top dollar in crappy areas. At least that is what I’ve seen in the Kansas City market.
Another option is going passive in larger deals. Just a couple things to think about!
37 Replies
- Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes6yAs you mention Phoenix is a good investment area for folks from So Cal. Here is a spreadsheet to help compare returns. Lots of California investors prefer being a bit closer to their properties for obvious reasons.
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)Average Turnkey Cash Flow Per Door In Phoenix Metro Area No Bank Financing Needed
- Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes6y
@Lisa Gauff, What do you do for a living? Is there a market sector or area of expertise you have, even if it doesn't appear related to real estate? Do you have family or friends in other areas that have insight into any changes or trends in a particular area or region? Are you or is anyone you know knowledgeable in student housing, senior housing, parolee housing, vacation rentals, church retreats, travelling nurse lodging, corporate housing, group travel, or anything related?
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes6y
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)I haven't hear of any of those companies before. There are a lot of bigger turnkey players right here on Bigger Pockets that are very well known. I suggest setting up keyword alerts for "turnkey" and the city name of all the cities you are interested in. You'll see a ton of discussion and get to hear from said players.
- Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes6y
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)I have never heard of any of these. I always suggest making sure you find a TRUE Turnkey provider. Many RE agents like to use the word Turnkey, but they are using it incorrectly. A Turnkey Provider should OWN the home first. They will renovate it while they own it. This should be done in-house as well. After that, they will place a tenant BEFORE selling it. Then you purchase the property and after the transaction, the company should stay on as the property manager. They should NOT introduce you to some third-party PM you have never heard of and you are just supposed to "take their word" for it that they are good.
Try looking at:
5 Keys to Turnkey Real Estate Investing
Assessing the Risk of a Turnkey Real Estate Company - 6yLee RipmaPro MemberRental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
@Lisa Gauff
I’ll just throw out a couple ideas - I know of a company in Kansas City with a cool alternative to TK key concept. You buy houses that the company master leases from you for a rent by the room model. The cash flow is higher, the property management is free, and you get to hold assets in A and B areas. My problem with TK companies has always been that you’re buying at top dollar in crappy areas. At least that is what I’ve seen in the Kansas City market.
Another option is going passive in larger deals. Just a couple things to think about!
- 6yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)Lisa,
I have heard of all four of these companies although I was not aware that they were all still in business. I am very familiar with JWB in Jacksonville and although I am not an investor with them, I have masterminded with them on best practices many times and they run a tight ship. They are similar to our company with their customer service programs and they have been in business I beleive since 2006(?). They are good people. As always, make sure you visit them in their offices at a minimum to confirm with your eyes what you hear when you speak with them.
Best,
Chris
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @James Wise:
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)I haven't hear of any of those companies before. There are a lot of bigger turnkey players right here on Bigger Pockets that are very well known. I suggest setting up keyword alerts for "turnkey" and the city name of all the cities you are interested in. You'll see a ton of discussion and get to hear from said players.
JIm,
JWB is one of the largest in the country.. based out of Jacksonville FLA.. vertically intergraded and well established..
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Tom Ott:
Originally posted by @Lisa Gauff:
Hi- I'm looking for my first rental property... under $300k.. and since I live in Los Angeles I'm having to look outside of my area.... and I work, so I don't have time or money to do much traveling or heavy duty rehabbing... and I don't have boots on the ground anywhere. I'm considering Las Vegas, Phoenix and Palm Springs areas... but nothing yet so far... and none of those areas are as cheap as the midwest. It would be attractive to buy something Turnkey if I could find a company I felt good about. I've talked to a few. So I'd like to know whether anyone has had any experience with the following... good or bad... or any other Turnkey operations - thanks!
Chris Salazar/Arsenal Properties (they focusing on Davenport, IA)
Michael Drew/Real Estate Done 4 U (focusing on Indiana)
Aaron Adams/Alpine Properties (focusing on Indianapolis)
JWB Rental Homes (focusing on Jacksonville, FL)I have never heard of any of these. I always suggest making sure you find a TRUE Turnkey provider. Many RE agents like to use the word Turnkey, but they are using it incorrectly. A Turnkey Provider should OWN the home first. They will renovate it while they own it. This should be done in-house as well. After that, they will place a tenant BEFORE selling it. Then you purchase the property and after the transaction, the company should stay on as the property manager. They should NOT introduce you to some third-party PM you have never heard of and you are just supposed to "take their word" for it that they are good.
Try looking at:
5 Keys to Turnkey Real Estate Investing
Assessing the Risk of a Turnkey Real Estate CompanyJWB is one of the largest in the country and well established they would tic your box's.
Alpine is probably the largest in Indy.. and been at it since before the GFC.
- Rental Property Investor | Realtor · Jacksonville FL | Savannah Ga |Raleigh NC · Member since 2017 · 467 posts · 161 votes6y
JWB has a good reputation.. Expect to pay well above retail with 3 year lease tenant. They buy cheap, tear down, and rebuild new, and then property manage the tenant and the house for you. Im envious of their model..its deal acquisition oriented to passive income..
- 6yRonan DonnellyPro MemberInvestor · New York City, NY · Member since 2012 · 332 posts · 385 votes
Hi @Lisa Gauff, I started out investing in single family homes, via a turnkey provider in 2012 and eventually bought 7 homes. Today I invest in and sponsor commercial multifamily value add deals. With that to provide some context here are som things worth considering
1) One advantage with turnkey is that it can be a very nicely packaged way to invest in real estate and for that reason it can be a good way to get started
2) It is sold as being entirely passive but in reality it isn't. You need to manage the property manager, stay on top of expenses, maintain books and records per property for accounting, apply for the mortgage, get insurance, etc, etc, etc
3) If the turnkey manager isn't doing a good job then you may need to find alternate management and there aren't typically a ton of good options
4) There are many other ways to invest in real estate whether it's through a fund or through a syndicate. These forms of investing also require extensive due diligence but you will have access to more institutional quality sponsors/operators and management companies with pretty favorable economics
Taking some action is key but I would encourage you to look at all the options for investing passively in real estate before deciding on turnkey properties. Good luck!
- 6yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
Originally posted by @Lee Ripma:
@Lisa Gauff
I’ll just throw out a couple ideas - I know of a company in Kansas City with a cool alternative to TK key concept. You buy houses that the company master leases from you for a rent by the room model. The cash flow is higher, the property management is free, and you get to hold assets in A and B areas. My problem with TK companies has always been that you’re buying at top dollar in crappy areas. At least that is what I’ve seen in the Kansas City market.
Another option is going passive in larger deals. Just a couple things to think about!
Lee, you can't really generalize by saying that you'll be buying at top dollar for properties in crappy areas. Good turn key companies don't sell over market value and most allow an appraisal contingency. There are a few Kansas City turn key companies that offer properties in good B class neighborhoods.
- Real Estate Broker · Jacksonville, FL · Member since 2014 · 78 posts · 54 votes6y
***only speaking on my local market***
My biggest issue with these 'turnkey' providers is what you're actually being sold. If your ONLY concern is the return on your dollar based upon the figures they are providing, then sure it probably makes sense, but that appears to be the only thing considered in these cases.
I see countless 'turnkey' properties that are sold for 30-50k+ more than the next TRUE comp in the area. Sure you're buying a new house (built with the CHEAPEST material)... but you're buying it in a D class (or worse) area. They typically place sub-par tenants on extended leases and overcharge based on market rent (this all helps those great numbers!).
If you ever look into these properties they are NEVER sold on the market. All deals tend to be sold to investors in large nationwide 'get rich from real estate & networking' groups that they are connected to. Once the deal is done the property is placed on the market with 1 photo, closed out showing 0 days on market and wah-lah they've created their own comp! Now they can justify the ridiculous prices to the next person they are after... that sounds ethical right? Don't worry though, you wouldn't know on the surface because if you pull the taxes you'd never tie it to them as they use countless llc's to protect the cause.
Oddly enough for as large as they are they still have other agents (not related to their group) place the homes on the MLS and then close them out to create said comp. They do own the management side of it as well and have showing/buyers agents (as they are always making offers from their own group) so it's not that they are incapable of listing their own homes.
All of this to say do your research on a true market value. If down the line they press you to sell through them and yet your house never hits the market here's why. It's being re-marketed to other investors in your exclusive real estate group that everyone paid thousands to be apart of and thinks they are getting these great off market deals. Likely they are pushing off you finding out about the true value and the only way for you to not uncover said truth, is to reel another unsuspecting investor in.
Rant over... sorry guys
I'm happy to pull true comps or help you dig into the background on any property.
- Investor · Los Angeles, CA · Member since 2019 · 17 posts · 9 votes6y
Thanks everyone for your input! @Account Closed,
- Phoenix, AZ · Member since 2019 · 6 posts · 1 vote6y
@Lee Ripma I'm curious to learn more about this alternative TK in KC you mentioned... Thx.
- Austin · Member since 2015 · 149 posts · 80 votes6y
Just checked out some of the property listings on JWB. The first 2 that showed up were like 6% w/out financing and 8% or 9% with financing. Pretty low?
- Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes6y
Second what @Lee Ripma said. We do a lot of work with OOS investors. We help them find a property, close on it, and then can consult for them, give them access to our network of subs, and even provide property management if they want it. That ensures our investors get equity and cash flow, in A and B neighborhoods. They can do as much or as little work as they feel comfortable with.
- Rental Property Investor · Jacksonville, FL · Member since 2012 · 114 posts · 98 votes6y
Is @Ronan Donnelly the only person on this thread who's actually bought from a turnkey provider? lol
Good insights there - thank you for weighing in!
Since we're all just throwing unsubstantiated opinions around I'll add my 2 cents.
Inventory is at historic lows in many areas of the country, which increases competition and prices. Turnkey providers are not immune from these market forces - and the returns they can offer are FAR below what an experienced individual investor could potentially achieve. At the end of the day, the point of investing is to turn a profit, so I don't see how buying from a turnkey provider is worthwhile.
(I am a buy and hold investor in Jacksonville with 13 doors, and live off my rental income.)
Personally I'm not a huge fan of JWB (although I've not bought from them) but that is mostly because they throw generic builder-grade tract homes on every low-quality lot they can get ahold of - whose only value is their "newness" - then sell, rinse and repeat. The work they do doesn't really improve the areas they're building in. In ten years you'll own a house that's starting to fall apart on the worst lot in the neighborhood. JWB exists to make money for JWB.
You might considering being a hard money lender - they definitely get paid more than 6% - just sayin'
- Investor · Member since 2020 · 6 posts · 1 vote6y
Originally posted by @Lee Ripma:
@Lisa Gauff
I’ll just throw out a couple ideas - I know of a company in Kansas City with a cool alternative to TK key concept.
Can you give the name of the company?
- Investor · Los Angeles, CA · Member since 2019 · 17 posts · 9 votes6y
I spoke with Ben Walls... one of the real estate agents in Kansas City with "livehomeroom.com". As I understand it, the company basically identifies properties you can buy that will fit their model... which is a roomate concept. For instance, in a 4+ bedroom single family home... they rent each bedroom to a different person, not to one family. That way they can charge more. Once you buy the property, they rehab it and give you a 3 year lease on it... which is supposed to guarantee cash flow. Of course it depends on your financing. This is similar to vacasa.com, which basically does the same thing with rentals in vacation markets. You buy the house and put it into their program... they rehab it and lease it back from you... they manage the property. The concept is hassle-free landlording and cash flow. Anyway, you can look up either company and contact them for more info...
- Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes6y
I do not know anything about the turnkeys you listed, but did live in CA for quite a while and had a few recommendations for lower cost homes.
Have you considered Redlands or Loma Linda? Sometimes they have homes right under $300k. Loma Linda Children's Hospital is the main draw here. ITs a teaching hospital associated with the Seventh Day Adventist Church. Most faculty and students are part of the church and will not tear the place up.
Also nearby are the San Bernardino Mountain communities--Crestline (local County lake for non-motorized boats, recreation and swimming, forest and hiking trails such as to heart rock) , Lake Arrowhead (private lake, allows boats, -make sure the lot has lake membership, some tv stars have vacation homes around here), Running Springs (closest to Snow Valley for skiing), Big Bear (Lake and close to skiing, but more expensive property). Easy to get a house under $300k here, and can do short term rentals, with County permit. About 1/2 the homes in these areas are full time residents, the other half is split as vacation/second homes and rentals that can be short or long term.
- Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes6y
@Lisa Gauff
Have you heard of Memphis Invest / REI Nation?
One of the nation's largest turn key providers.
Operation in a few southern markets in Texas, Oklahoma, Arkansas and Tennessee.
Good luck!
- 6yMichael ClaybornePro MemberRealtor · Norman, OK · Member since 2016 · 49 posts · 29 votes
The Oklahoma City Metro and surrounding areas are also a popular market for out of state investors, we see a lot of CA investors like yourself investing here.
The folks over at Table Investments do a lot of turnkey deals in this market, they are very professional, and have an interesting turnkey model. Kiera Underwood is one of the people over there you can reach out to learn more.
Although I have not invested with them yet, their business model and the information they provide about the market here I find to be very valuable. Worth talking to in my mind.Sorry that I don't know anything about the turnkey companies you listed, but I hope this helps. Good Luck!
- 6yTom PricePro MemberInvestor · Bend, OR · Member since 2016 · 29 posts · 39 votes
I own properties with JWB. They make the whole experience seamless. True returns are lower then finding properties on your own.
In our case we have been investing for over 40 years as hands on. We are now transitioning to a lifestyle change of a more passive investment strategy. We are willing to give up a little bit of return for piece of mind .
That said JWB has been a great partner and has delivered on all of their promises with us. They do seem to be pricing themselves out of the market though. The increases in prices the last 6 months have us looking into other turnkey providers for additional properties.
REI Nation for one.Rent to Retire is another one we are researching.
- 6yAxel MeierhoeferPro MemberRental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
@Lisa Gauff I just completed 7 transactions in the Davenport area you mentioned as well as the Dayton, OH area. I will hopefully complete #8 by the end of January. They are all with TK providers.
I am considering JWB but their price points are a little higher than I like to be right now.
I am applying the processes and checklists Chris Clothier has in his book. If you like, I am happy to talk to you about it, mentor you if you are looking for that and provide you access to my network. I live in Escondido, not far from you, so we could even meet and discuss in person.
Feel free to PM me.
- Investor · Los Angeles, CA · Member since 2019 · 17 posts · 9 votes6y
Thanks All for the suggestions - Really Helps! Yes, @Lynnette E. I have been looking in other parts of CA... but had shied away from San Bernardino cause of the property values... and also have considered resort markets... like the Palm Springs area... but mainly cause I wouldn't mind living there. Then I started evaluating whether I really wanted to deal with a vacation rental.... and second home markets.... cause in a downturn that could suck. I like your Loma Linda suggestion... and I know Redlands has a university out there. Thanks also @Dennis Fernandez and @Michael Clayborne for the referral to Table...hadn't heard of them... will have to check them out. @Tom Price... yes, the Turnkey's websites I've looked at Roofstock, RentToRetire, and a few others... the prices seem a bit high. I look at both the sold comps and the rental comps... and a lot of times it seems the Turnkey companies are presenting very optimistic numbers... sometimes fantasy figures... which of course means they can present better numbers on these properties. I know I will not make as much with Turnkey - trading profits for convenience - but the numbers need to be more realistic. Now I'm kinda leaning towards Multi-plex... even an 8 or 10 plex to try to scale faster... though I know it's less liquid. So, yes, I know I'm considering a lot of stuff... but it's all helping me narrow down my focus. And Yes! @Axel Meierhoefer... let's definitely chat!
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