Turnkey companies good or bad?

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Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y

I am a huge proponent of turnkey companies because it is one of the easiest ways to get started with investing out of state. I have personally worked with a couple of them and I would definitely recommend their operation. Feel free to reach out and we can discuss. 

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  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    4y

    I am a huge proponent of turnkey companies because it is one of the easiest ways to get started with investing out of state. I have personally worked with a couple of them and I would definitely recommend their operation. Feel free to reach out and we can discuss. 

    1Reply
  • Harshdeep Gupta
    Rental Property Investor · Renton, WA · Member since 2022 · 10 posts · 4 votes
    4y

    I can't comment on good or bad, there are definitely a lot of them out there. And there are pros and cons with investing with that approach.

    Aj has already mentioned the pros.

    It is not a good way if you want to scale, and that too fast.

    If you read the BRRRR book by David Greene, he says when you are buying turnkey, you are building wealth for someone else.

    Let's say you buy something for 200k. The company from which you bought it, essentially got the property for free, because they used the BRRRR method, and now you get that cash flowing property, but you are also out 200k.

    If you take the time and effort to teach yourself the BRRRR method, that 200k can easily buy you two properties (like very easily). Maybe even three, four..... you get the point.

    So yeah, choose your poison. Either buy turnkey but be out of money, or do BRRRR but put in the hardwork. I lean towards BRRRR because it is a skill, once you learn it, it stays with you for lifetime.

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    4y
    Quote from @Eduardo Tanamachi:

    Hi! Can you all please share your good and bad experiences w/ turnkey companies. Do you recommend any? Thanks!


     Like anything, some are good, some are bad. The cream always rises to the top though.

    0Reply
  • Steven Taylor
    Member since 2021 · 24 posts · 14 votes
    4y

    @Eduardo Tanamachi  It's a great way to get started and have someone show you the ropes.  You won't make a killing in terms of the deal, but if you work with a good company you can get a solid property, while getting something more valuable, education, and actually getting into the RE game.  One thing you MUST DO is get an independent inspection regardless of what the Turnkey provider says or provides.  "Turnkey" means different things to different people. 

    Good luck!
    S

    1Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    4y
    Quote from @James Wise:
    Quote from @Eduardo Tanamachi:

    Hi! Can you all please share your good and bad experiences w/ turnkey companies. Do you recommend any? Thanks!


     Like anything, some are good, some are bad. The cream always rises to the top though.


    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    4y
    Quote from @James Hamling:
    Quote from @James Wise:
    Quote from @Eduardo Tanamachi:

    Hi! Can you all please share your good and bad experiences w/ turnkey companies. Do you recommend any? Thanks!


     Like anything, some are good, some are bad. The cream always rises to the top though.


    0Reply
  • Account Closed
    Rental Property Investor · Austin, TX · Member since 2019 · 21 posts · 65 votes
    4y
    Quote from @Steven Taylor:

    @Eduardo Tanamachi  ...One thing you MUST DO is get an independent inspection regardless of what the Turnkey provider says or provides.  "Turnkey" means different things to different people. 

    Good luck!
    S

    Absolutely, 100%, couldn't agree more. Two things someone can do that should send alarms going off in your head is to pay all cash and skip an appraisal, and to not get an inspection report. You should get an inspection report on everything, even new construction. Something is always missed (nearly always unintentionally). You could be the renovator yourself and if you got an inspection you'd be shocked at what you needed to do based on the inspection. 

    Now if they provide you with a 3rd party inspection and you send the inspector out to verify things once the fixes to the initial inspection have already been done, that's fine in my book, but it's up to you to decide on that one.

    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    4y

    Some are good, some are bad (a few being even scams) so do your due diligence (meet with them, see their work, call references, look at online reviews, ask around, etc.) But even the good ones aren't going to get you great deals. You'll be buying at something close to market usually, maybe even a bit over. But the good ones will manage well and in the long run, owning real estate is huge for your net worth. 

    Podcast Guest on Show #121
    0Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    4y
    Quote from @James Wise:
    Quote from @James Hamling:
    Quote from @James Wise:
    Quote from @Eduardo Tanamachi:

    Hi! Can you all please share your good and bad experiences w/ turnkey companies. Do you recommend any? Thanks!


     Like anything, some are good, some are bad. The cream always rises to the top though.



    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    4y
    Quote from @James Hamling:
    Quote from @James Wise:
    Quote from @James Hamling:
    Quote from @James Wise:
    Quote from @Eduardo Tanamachi:

    Hi! Can you all please share your good and bad experiences w/ turnkey companies. Do you recommend any? Thanks!


     Like anything, some are good, some are bad. The cream always rises to the top though.



    Trippy Brother.....
    0Reply
  • William Morales
    Member since 2020 · 22 posts · 14 votes
    4y

    I called a turnkey company a few years ago in Indiana, I was interested in a property they had for sale at the time for, if I remember correctly about $60k, the company turned around tried to upsell me to a another property for $80k, no reason was given for the change when I didn't request a more expensive property, so that turned me off, plus I heard through other investors the numbers they provide are not always accurate. 

    0Reply
  • Quentin Jivery
    Member since 2022 · 92 posts · 11 votes
    4y
    Quote from @Harshdeep Gupta:

    I can't comment on good or bad, there are definitely a lot of them out there. And there are pros and cons with investing with that approach.

    Aj has already mentioned the pros.

    It is not a good way if you want to scale, and that too fast.

    If you read the BRRRR book by David Greene, he says when you are buying turnkey, you are building wealth for someone else.

    Let's say you buy something for 200k. The company from which you bought it, essentially got the property for free, because they used the BRRRR method, and now you get that cash flowing property, but you are also out 200k.

    If you take the time and effort to teach yourself the BRRRR method, that 200k can easily buy you two properties (like very easily). Maybe even three, four..... you get the point.

    So yeah, choose your poison. Either buy turnkey but be out of money, or do BRRRR but put in the hardwork. I lean towards BRRRR because it is a skill, once you learn it, it stays with you for lifetime.


     Do you think in todays market BRRRRS are still succsesful? And if so how are you finding them?

    1Reply
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