All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Companies Hard Money Lenders Contractors Investment Companies

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowBuying & Selling Real Estate DiscussionArrowI love my Turnkey Investments. BP is skeptical. Am I just lucky?
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Create post

I love my Turnkey Investments. BP is skeptical. Am I just lucky?

127 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Flipping
  • Posts 459
  • Votes 318

Axel Meierhoefer
Rental Property Investor from Escondido, CA

posted about 1 month ago

I have a strategy I call out of state turnkey residential investing or "OOS TK SFR". We have all our properties in this model and have great experiences for several year now. When I speak to people here on BP, a lot of them tell me that turnkey does not have a good reputation on Bigger Pockets, sometimes even to the point of being surprised when I describe what we do, how we do it, and how well we have been getting the desired results, especially when it comes to cash flow.

Am I just lucky, what are your experiences, and what do you think about turnkey investing in residential real estate?   

Rotate Log in or sign up to reply
user profile avatar
  • Posts 189
  • Votes 187

Andrew Rosenberg
from Honolulu, HI

replied about 1 month ago

That's great Axel, it's nice to hear you're doing well.  I THINK like anything there's an onus on the investor to verify the numbers themselves and selects the right vendor.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Traditional Financing, Taxes & Accounting, and Real Estate Finance
  • Posts 3.1K
  • Votes 2.7K

Taylor L.
Real Estate Syndicator from Richmond, VA

replied about 1 month ago

I think it's a question of goals. Many members of BP are looking to be more active in their investments and use more active strategies - BRRRR, flips, and so forth. However, for a high paid professional looking for a steady appreciation and income in preparation for retirement, they can work well.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 339
  • Votes 355

Dennis Wayne

replied about 1 month ago

Well don’t get too excited the reality is Your numbers probably suck and you just don’t realize it or understand you could do much better because you live in a hot market that has no decent cashflow to speak of

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Team, and Single Family
  • Posts 714
  • Votes 976

John Morgan
Rental Property Investor from Grand Prairie, TX

replied about 1 month ago

@Axel Meierhoefer

I bought a couple local properties I manage myself as basically turnkey. They've been great for me but I've only had them for three years and have only had one turnover so far. My only concern about turnkey out of state is getting turnovers. Many of these properties are bought at market rate. And if you have a turnover every couple years, you're probably breaking even other than appreciation. It's great for the management companies because they get a month rent to find a new tenant to place in plus charging 10% to manage and any other fees they seem to charge like annual renewals or inspections. And the owner loses a months rent and 2-4k in expenses to turn it. But for those wanting to be hands off and not really care about a high ROI, I would definitely recommend it.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Flipping
  • Posts 459
  • Votes 318

Axel Meierhoefer
Rental Property Investor from Escondido, CA

replied about 1 month ago

@Andrew Rosenberg Yes, totally. I would even go one step further and say that it is important to have a set of criteria and principle. Several times over the years I was tempted to buy something or consider a location only to find that they did not meet my criteria and principle. They looked soooo good and sounded so interesting, but in the end sticking to my criteria and principles has always protected me from my excitement and foolishness

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Flipping
  • Posts 459
  • Votes 318

Axel Meierhoefer
Rental Property Investor from Escondido, CA

replied about 1 month ago

@Taylor L.   Yes, totally. Passive is one of the most important terms for me. Still, I had to learn that the promise of passivity and the reality can be very far apart. the quality of the turnkey provider makes a huge difference. I have had a few and am now down to just three that I work with. I would like to add a 4th one to have more local diversity, but its hard to find one that really has everything under one roof (reno, sale, property management) and lives up to the plan by applying all the criteria. Constancy is really the key. If that's not there, you have a few good months and then a bunch of bad ones. I am lucky to have found my providers who really renovate well so things don't break and select tenants well so rent comes in without any issues.

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Flipping
  • Posts 459
  • Votes 318

Axel Meierhoefer
Rental Property Investor from Escondido, CA

replied about 1 month ago

@Dennis Wayne Not sure how to respond to that statement. The numbers are always in the eye of the beholder. What yuo would call bad might be acceptable to me.

In 2020 my properties appreciated by 9% and produced almost $3000 cashflow per month. No rents were missed and repairs were very minimal.

Reserves grew to $30K and now the 15% I used to put aside to build the reserves are coming to me as cash flow. I am in the process of buying 3 more properties.

My strategy to hold all my properties in well preforming locations , which is far away from San Diego, where I live, means that the valuations in my area are irrelevant. You are right they are very high and performance is very bad, but since I don't own any investment properties, it doesn't really matter to me. 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 339
  • Votes 355

Dennis Wayne

replied about 1 month ago

@Axel Meierhoefer

Well maybe I’m way off base . What kind of numbers are you seeing ? Likes the buying these for 30k and getting 900$ in rent ?

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subjects:
Tenants, Rentals, and Flipping
  • Posts 459
  • Votes 318

Axel Meierhoefer
Rental Property Investor from Escondido, CA

replied about 1 month ago

@John Morgan You are right, that would be a problem. In my world (so far) the reality is that people don't want to move out. I actually have one property I am going to change and need to do some work on for that to work. The lease is coming to an end and when we informed the tenant that we are not renewing she did anything I could imagine except begging on her knees.

I have found there are a few things to consider and combine that lead to tenants who stay:

1. They like the property and are ok with the rent they pay for the value and service they receive

2. They call the property home

3. They have a stable job that allows them to work, have money left to enjoy life and pay rent on time

4. The relationship with property management is good, so the little stuff is not called in all the time and when there is something serious, the PM is handling it quickly 

5. The market is stable or improving, meaning moving to another property will not cost less but probably more, if you can find one at all

6. The size of the property is such that the development of the family is easy. Have three bedrooms when you only have 1 child, and if you get more, you can still expand the family without needed a new house.

7. Having hobbies that cost money, so instead of saving the money goes into those hobbies and the ability to purchase a house and make a down payment is low.

There are probably a bunch more but that is the combination I see and when it is present (or at least most of it is), the tenants stay and renew. That does not mean there there is no turnover, but its minimal.

The other thing I did when I started was developing a reserve account. For my 10 properties I have $30K in it. That came from putting 15% of all rents aside. In my contracts I have a clause that states that the TK provider covers all repairs in the first years and has to make sure that a tenant is in the property from day 1 (ideally at day of closing). Completion of repairs can't be more than 2 months ago and if there is no tenants the TK provider pays the rent until they find the first tenant.

All this helps to make the majority of decisions in the purchasing phase and then just enjoy the ride. 

I can't tell how that will look like 5 - 10 years down the road, but so far it works well.

Rotate Log in or sign up to reply
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • …
  • 12
  • 13

Related Discussions

  • Ask About A Real Estate CompanyExperiences with JAX investmentsJan 14 2021, 18:16
  • General Real Estate InvestingInvesting In Turnkey PropertiesOct 12 2019, 06:04
  • Multi-Family and Apartment Investing ForumsShould I invest in REIT for now???????Apr 22 2016, 18:50

Related Blog Posts & Podcasts

  • Rookie Podcast 57: Virtual Assistants, Roach Infestations, and Turnkey Companies with Maria AcostaMar 3 2021, 00:00
  • Rookie Podcast 58: Rookie Reply: Doing The Work Yourself vs. Hiring OutMar 5 2021, 23:02
  • Rookie Podcast 57: Virtual Assistants, Roach Infestations, and Turnkey Companies with Maria AcostaMar 2 2021, 23:02
Related Resources Buying & Selling Real Estate Discussion
How to Choose the Right Remote Real Estate Market for You
Home Purchase Fall Through? Don’t Panic: Here’s How to Get Your Earnest Money Back
What Is Underwriting? Here’s What to Expect
8 Reasons Smart Investors Get Their Real Estate License
Understanding Real Estate Commissions (And How to Negotiate Them!)
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Jay Hinrichs
Jay Hinrichs
Lake Oswego OR Summerlin, NV
8.97
Score
Tri Le
Tri Le
Cincinnati, OH
7.71
Score
Remington Lyman
Remington Lyman
Columbus, OH
6.14
Score
Brandon Sturgill
Brandon Sturgill
Columbus, OH
6.12
Score
Jonathan Greene
Jonathan Greene
Montclair, NJ
6.11
Score

Buying & Selling Real Estate Discussion Trending Discussions

  • Recreational land... Anyone?
    7 Replies
  • Getting my real estate license
    2 Replies
  • Would you buy in the Bay Area right now?
    7 Replies
  • Appraisal Came in Low. Now What?
    23 Replies
  • Are you having success selling on lease option?
    2 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.