Colorado Springs - Turnkey Provider Recommendations
Hi All - I'm looking for any recommendations for single family home turnkey providers and managers in Colorado Springs. I would be looking to finance and would therefore appreciate providers with established connections with local lenders.
As my profile reveals, I'm currently out of the country and don't (yet) invest in the US. Still, I'm a frequent reader of the Colorado Springs related posts as I have family ties to the area, which makes me more comfortable investing there over other US markets.
Thanks in advance!
Originally posted by @David Gotsill:
Hi All - I'm looking for any recommendations for single family home turnkey providers and managers in Colorado Springs. I would be looking to finance and would therefore appreciate providers with established connections with local lenders.
As my profile reveals, I'm currently out of the country and don't (yet) invest in the US. Still, I'm a frequent reader of the Colorado Springs related posts as I have family ties to the area, which makes me more comfortable investing there over other US markets.
Thanks in advance!
Well, I do not know too much about CO, but I always suggest doing the research on the specific company you find. Make sure they are a REAL provider and not just an agent trying to earn a commission. They should own, renovate, and manage the property all in-house. They should not use any third parties along the way.
Feel free to look at:
The Best Types of Markets for Profitable Turnkey Properties
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not sure there are any probably just need to find a good agent and buy right of off MLS
@David Gotsill - Here are few local lenders I would recommend talking to for an investment loan on a Single Family Home.
Sharon Ballinger - VIP Mortgage
Paul Abair - Caliber Home Loans
Kim Rogers - Peoples Bank
I will put these in a private message to you as well so I can share all their contact info with you.
Thanks for the advice @Tom Ott and @Jay Hinrichs.
@Colin Smith, thanks for th contacts. Let's re-connect soon (I believe we spoke earlier this year).
For management, I use and recommend Russ Breckenridge with Pink Realty and Jesse Scott with Muldoon's. I haven't used but have heard good things about Carolyn Rodgers with All Seasons.
Hey @David Gotsill have you thought about doing short term rentals with your potential property? Sometimes it can provide a good bit more revenue with little to no-extra work and CS has very Airbnb friendly laws. If you're interested I'd be happy to connect!
To newer real estate investors, turnkey properties often pose an irresistible temptation. After all, who wouldn’t want to boost their cash flow while doing basically zero work?
There are two problems with this line of thought.
First, investing in turnkey properties hurts your bottom line. Naturally, a company that claims to do everything for you is going to charge higher rates, and in the long run, that will show in your bank account.
Second, and more importantly, you still have to do work. Sure, the turnkey company will take care of renovations, maintenance, and other issues. But you still have to do research, and a lot of the time, you’ll have to keep an eye on them to make sure everything is going smoothly.
“What’s that? It needs some minor maintenance? Yeah, just bill me later.” Ali Boone, an awesome blogger on BiggerPockets, goes over some of the pros and cons of turnkey investing in a recent article. I don’t want to regurgitate too much, but her main argument is that only experienced investors should use turnkey providers. Due to higher fees, turnkey agencies offer lower profit margins, which works great for people buying properties in bulk, but not so well for those with smaller portfolios. Turnkey providers also have huge inventories, which can result in subpar service, a big no-no if you want to meet and stay on good terms with your tenants.
This seems to present a catch-22: either you earn cash flow by managing your rental property yourself, or you hire someone to take care of it and lose out on most of the profits. Yet you have another option, a third path which will save you work and preserve most of your cash flow. You can (and, in my opinion, should) seek out a third party property manager.
What’s the difference?
Traditionally, turnkey companies contain both real estate agents and property managers. By nature, they’re designed to buy quickly and efficiently with minimal questions. This means that, upon buying the property, maintenance will be up to date, and you’ll often have a tenant and property manager already in place. Typically, this will cost you a bit more per month — around 10–12% for a turnkey company compared to 7–10% for a third party property manager.
Yet, for most of these third party managers, the competitive advantage doesn’t lie in the pricing. It lies in the customer service. Think about it: turnkey companies manage hundreds or even thousands of properties at a time. They’re not terribly concerned with their tenants. For them, tenant turnover is just a fact of life, an inevitability in their well-oiled real estate machine. For you, though, tenant turnover is a pretty significant dent in your checkbook.
A few extra dollars a month to ensure no hassle? Still sounds like a pretty good deal. Unfortunately, the real costs don’t lie in the rent — they lie in other miscellaneous costs that build up. Fi Fighter goes into excellent detail in their article on the hidden costs involved. The author offers couple examples that stick out in particular. First, as I mentioned earlier, turnover is costly. In addition to the cash flow lost in vacancy, rent-ready turnover, or the maintenance costs of renovation, costs about $850 for an average single-family home in Indianapolis. This cost largely consists of general repairs ($460 according to the article) which could largely be avoided with a little elbow grease.
“Three thousand dollars for mowing the lawn? That doesn’t seem right” The author also goes over some of the eviction fees, often the result of the insufficient screening on the part of turnkey companies. Depending on where you live, the legal costs involved can be outrageous — Chicago, for instance, costs $1,672 between attorney and settlement fees. Since evictions in Chicago usually take up to two months, those fees are in addition to two months of rent you’ll lose out on. With a boutique or third party property manager, your chances of getting a problem tenant (and thus dealing with an eviction) are much slimmer.
We all know what happens when you don’t vet tenants properly. Aside from the added cost, turnkey companies generally offer little to no transparency. Ms. Boone says it best:
Turnkey sellers deal with so many buyers so quickly that if they spent that much time answering exhaustive lists of questions from every client, they would never get anything done.
This doesn’t mean that you can’t do your due diligence before investing. It just means that you have to be experienced and know how to play the game.
I'm new to this forum, and big OPPS, the above post beginning with "
To newer real estate investors, turnkey properties often pose an irresistible temptation" was an accidental cut and paste, which i did not intend to post, but it happened due to an accidental click when my page went blank. Moderator should feel free to delete the post if they want to.
So, back to the subject of Turnkey Providers in Colorado Springs. There are some big, long established turnkey providers like Atlas Real Estate Group, which claims to manage 1,300 properties in the Denver and Colorado Springs area, or like Real Property Management Colorado. I have heard good things about both companies, but I do not have experience with them because I am trying to manage and flip properties on my own.
@Kay Sensibrener - thanks for the thoughts, and no worries about the copy/paste error. Even it was an accident, there are nevertheless some points in there worth considering.
Also, thanks for the leads on Atlas and Real Property Management. I'd recently heard of Atlas, and appreciate a second opinion (even if it's heresay) on their operation. Real Property Management is new to me. I'll look into each further.
Best of luck!
@Tyler Work - I hadn't considered short-term rentals in COS before. In your experience, what types of properties are popular (in terms of size, grade and location)? This is just speculation, but I would tend to think A/B class properties in prime locations let better on Airbnb. Do other properties also perform well?
David, Did you end up doing anything with Colorado Springs ? I currently have one property in Tennessee and I'm potentially looking for my next property in CS. I talked to Mike Hills from Real Atlas a while back and will probably be visiting him in March when I go to Colorado on a ski trip.
I'd like to hear your experience you had with Colorado real estate and/or any interactions you may have had with Real Atlas.
@Brian Stratton | Did you end up having your meeting with Atlas? I'm in the Denver area, but don't have much time available, so I'm wondering about a local turnkey.
@David Gotsill | It looks like you have a turnkey property in your profile now. Was this in COS and who'd you work with (even if not in COS)?
I met with Atlas. Nice people but at this point I am not ready to buy property in Denver/Colorado Springs area. The market is way to hot for my liking. I will wait for a correction or I won't invest at all in that area.