Turn key out of area

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Turn key out of area

Derek Carroll
Syndicator and Fund Manager · Victor, NY · Member since 2012 · 760 posts · 345 votes
How are people finding out of area turn key investors? I come across a lot of deals that are good monthly cash flow generators that would be great for those looking on a buy and hold strategy but they aren't attractive flip opportunities.
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Ryan Mullin
Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes
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There are a lot of users on BiggerPockets that are looking for good "out of state" deals to hold onto.   That's the easy part.   The hard part is having an operation able to provide property management after the sale.  If you sell "turnkey" properties the investors buying them are relying on you to do everything in the field.  Its very challenging to balance acquisitions, rehabbing, leasing and management.  If the properties don't preform your reputation will suffer and you probably won't sell to many.  I actually just wrote an article here about how an ideal turnkey operator should function if you feel like reading :) 

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Turnkeys are essentially properties being flipped, so buying them as turnkeys wouldn't make sense to flip because there isn't any work left you can put into them, it's all already been done.

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  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
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    @Derek Carroll basically you need to set yourself up to market them or find a marketing company looking for inventory in your area. We buy from people like you in Memphis for example, there are bound to be marketers looking for inventory in your city.  Or else do it yourself but it means setting up a new business!

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  • Ryan Mullin
    Real Estate Broker · Indianapolis, IN · Member since 2009 · 575 posts · 496 votes
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    There are a lot of users on BiggerPockets that are looking for good "out of state" deals to hold onto.   That's the easy part.   The hard part is having an operation able to provide property management after the sale.  If you sell "turnkey" properties the investors buying them are relying on you to do everything in the field.  Its very challenging to balance acquisitions, rehabbing, leasing and management.  If the properties don't preform your reputation will suffer and you probably won't sell to many.  I actually just wrote an article here about how an ideal turnkey operator should function if you feel like reading :) 

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  • Rodney Kuhl
    Rental Property Investor · Fishers, IN · Member since 2013 · 381 posts · 69 votes
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    Great article, @Ryan Mullin !

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  • Melodee Lucido
    Real Estate Investor · OR · Member since 2012 · 390 posts · 133 votes
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    Derek,

    As @Dean Letfus mentioned you can set up marketing for the properties with all of the important data. The buyers will find you because they are actively searching online for cash flowing properties that they don't have to worry about.

    You can decide what you want your margins to be based on the comps in the area and what your prospective buyers are looking/asking for. I like to give my buyers a bit extra by selling under market comps---about 80%ish.

    With our turnkeys we provide excellent referrals for PM, contractors etc. As @Ryan Mullin said it is a lot to handle yourself. That's why many partner up with others to get the job done.

    Delivering excellent service on very nice properties at great prices keeps the buyers coming back for more ;-)

    Best of Success!

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
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    Originally posted by @Derek Carroll:

    How are people finding out of area turn key investors? I come across a lot of deals that are good monthly cash flow generators that would be great for those looking on a buy and hold strategy but they aren't attractive flip opportunities.

    Hi Derek,

    Through lots of hard work :)

    It took us 10 months to establish relationships with a few companies that just specialize in working with investors.

    The companies would promote and sell our properties.

    Thanks and have a great day.

    Podcast Guest on Show #89
    Oz Realty4.5368 Reviews
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  • Rob Boese
    Investor · Fresno, CA · Member since 2014 · 34 posts · 9 votes
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    @Ryan Mullin  Hi Ryan, nice article. We provide complete turnkey solutions through our property management and brokerage services. The only thing I disagree with in the article is using outsourced leasing agents. By having a third party dump a tenant in the property, you are essentially leaving the most important component to chance: a stable non-psychotic rent producing tenant! All humor aside, a qualified property manager will carefully screen a tenant as they have to deal with all the issues associated to property. What incentive is a wooden nickle bonus to go through the process of finding a tenant only to receive multiple weekend/holiday calls for a disruptive tenant? Or chase rent? I always think your property manager should be able to screen and place your tenant but perhaps we are different in this regard. If one of our placed tenants fails to see out the first 12 months we'll find another for no additional commission. Essentially, a tenant can stay for 11.9 months and if they bail, we'll get you a new ASAP for no additional compensation. It is to the benefit of the turnkey operator/property manager to have the property running at maximum efficiency for the long term to support the property management fees. 

    I have a highly specialized leasing team. This allows us to acquire nonperforming properties and lease them up with varied degrees of improvements, oftentimes with little or no renovation. Oftentimes, these properties just need to be given an intense marketing campaign to get as many qualified tenants as possible interested. If you wanted a turnkey situation with all the improvements and the property to come with all long term stable tenants, the cost of entry unto that investment vehicle would be fairly high, leaving little or no "meat on the bone" as they say. We're good locating nonperforming properties in the Fresno, CA area, purchasing and filling them with good, quiet and stable paying tenants. Our total delinquency rate is usually below 6 total tenants across commercial and residential with 200+ tenants. We have no current evictions scheduled and the 3% are typically 1 month or less behind for various non-eviction worthy reasons.

    In turnkey, as with all our investment vehicles, the investors can be involved in the process as much as they like. I like investors to be involved in the leasing process. This is THEIR tenant, and I am intrusted in keeping that tenant safe and satisfied in return for timely rent. Investors, especially our new investors should be actively involved until we earn their trust and thus more business and hopefully, they will write a nice reference or review of my company or recommend us to future clients.

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  • Franklin Romine
    Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
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    @Rob Boese In your post you said you acquire non performing properties to lease up.  Are you personally buying real estate?  What is an address to one that you did in Fresno?

    Frank

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  • Rob Boese
    Investor · Fresno, CA · Member since 2014 · 34 posts · 9 votes
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    Hello Frank! We help our investors purchase real estate 

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