Looking for Property Managers and Turnkey Providers
Investor · Dublin, CA · Member since 2016 · 344 posts · 228 votes
Hi Everyone,
Hope Everyone is having a great day. I am currently invested in Atlanta, Birmingham and Dallas markets. I am looking for PM and TKP in Cincinnati market.
Please let me know if you can recommend anyone.
Regards,
Alpesh
@Jad Boudiab - although I'm sure your business model may be sound, it's quite a stretch to say that it is leaving more value and equity. The investor is making a one-time purchase (no volume discount) that is PRE-rehab. So, they're taking all the risk. Then you provide construction services, clearly at some sort of markup... and that rehab is not standardized, as you're now working with the investor on what they want, (which may not always be the same thing as what's best for that market). This will ALWAYS make the rehab cost more. Then you provide management services, at some sort of markup.
Conversely, we (as a TK) go out and buy in volume. We get discounts up front....rarely buy off the MLS. In some cases, we pay less than local wholesalers. We only buy vacant properties. We then do a STANDARDIZED rehab with TWO outside inspections...one before, one after. We do so many of these (and warehouse our own regularly used materials), that most of our rehabs come in at HALF the price of what a decent contractor would charge us. We then place the tenant, and give a warranty on the rehab done. We then take a small markup for the entire process, but that markup is NOT felt by the investor due to our economies of scale. And, although we have in-house management, we certainly will entertain investors like @Alpesh Parmar who may want to use an outside company (although our in-house team will ALWAYS charge less maintenance costs). In essence WE have taken ALL the risk up front. We've even placed the tenant - and didn't adopt someone else's nightmare. The investor is simply walking in to an already performing property without the inherent risk of buying and rehabbing.
As @Milton Marcelin pointed out, there are some unscrupulous providers out there, but there are some darned good ones too. Just like in any industry. You've got to vet the ones out that don't make sense for you to work with. We are Indy only, but in Birmingham, Spartan is a an excellent outfit, and although he doesn't do the work himself @Antoine Martel may be able to find you some good TK stuff in some of the other cities you've mentioned.
Good luck!
hi. I have a great provider and pm in Cincinnati. Dm me !
hi. I have a great provider and pm in Cincinnati. Dm me !
Will do, Melissa.
Hi @Alpesh Parmar, I have a great PM and may be able to help you with TKP, but would need to understand your needs. Message me and let’s chat.
Hi @Alpesh Parmar, I have a great PM and may be able to help you with TKP, but would need to understand your needs. Message me and let’s chat.
Will DM you.
@Alpesh Parmar Just sent you the TKP in Montgomery and Birmingham that you requested, and if you want Ohio, or other markets just let me know and I will send you more. I work with some of the best TKP across the country- and I am very unbiased because I don't work for 1 specific TK company, I vet out the best ones and work with some awesome teams in about 16 different markets. Happy to send you more!
@Melissa Nash, I am new investor and looking for TKP and PM in east coast like memphis, TN, Cleveland, oh, cincinnati, oh, birmingham AL. Could you please also recommend me some TKP and PM in these areas? Thanks.
@Eva
@Eva Huang yes I sure can. Messaging you now.
@Eva Huang check out @Antoine Martel. He does turnkey in cleveland, memphis and birmingham.
@alpesh Not sure if you are aware of this or even care for that matter. I'll still share it here just in case anyone can gain anything from it.
One of the things I see some "Turnkey" providers doing is buying a property which is already tenant occupied from the MLS. They then raise the price by 40% and sell it OFF market to investors as "Turnkey". No work was ever done besides raising the price 40%. Not sure how ethical that is. Just something to be aware of, at the very least.
You may be able to find "Turnkey" properties without going through a middle man. Especially if all the Turnkey Provider is doing is essentially Real Estate Arbitrage. Just search for properties which are tenant occupied. Double check to to see how long ago it last sold and for how much.
Best!
@Melissa Nash I have a couple properties in Texas and Arizona but did things the hard way. I’m willing to pay a bit more for the property’s in order to skip all the headaches. I would love to invest in other different states ; none in particular but if you would message me you’re TK and PM information so that I can see what’s out there. I truly appreciate any time you spent sharing. Very kind of you. Thanks in advance
@Matthew
@Matthew Miller I totally get that and that is why TK is so awesome when you live in another state- no hassle and as long as you have a good team and good PM its a no brainer.
@Milton Marcelin which is exactly why you want to work with a reputable team that knows what they are doing and are truly turnkey. Nothing wrong with finding a good property w/ a tenant, but don't call it turnkey. I like the term "rent ready" instead. As long as you know what you are buying and the numbers work then its an easy decision.
@Alpesh Parmar Just sent you the TKP in Montgomery and Birmingham that you requested, and if you want Ohio, or other markets just let me know and I will send you more. I work with some of the best TKP across the country- and I am very unbiased because I don't work for 1 specific TK company, I vet out the best ones and work with some awesome teams in about 16 different markets. Happy to send you more!
Hey Melissa, what (turnkey promoter) company are you with? Or is it your own company?
@Milton Marcelin @Melissa Nash you both make great points.
There are lots of "Turnkey" providers that give the industry a bad rep, and as @Melissa Nash mentioned a reputable company who's in it for the long game and interested in working with the client for 10-20 years will not slip a quick one on you. It will eventually come around, and the client will leave them for a more reputable provider / opportunity. Think Morris Invest, and the whole short term gains that's come back around to haunt them.
I personally don't like the traditional turnkey model as a value add investor, since the work is done for you at a premium. I do however see it as a great option for someone in the medical profession, for example, who's not capable of putting all the pieces together themselves.
We've gone the route of helping the client buy on / off the MLS, providing them the construction and management services they need post closing, therefore leaving more value and equity for the investor. This is similar to what @Milton Marcelin is referencing by going around the middleman. It's slightly more work to start, same process post-closing.
Hi Everyone,
Hope Everyone is having a great day. I am currently invested in Atlanta, Birmingham and Dallas markets. I am looking for PM and TKP in Cincinnati market.
Please let me know if you can recommend anyone.
Regards,
Alpesh
Working with a Turnkey Provider can be a great way to earn passive income.
I always suggest making sure they are a REAL Provider. They should own the property first, renovate it, sell it to you with a tenant in place, and do all of the management in house. The only third party involved should be your home inspection. They should not push you off on some management company after closing.
Try looking at:
What to Ask When Working With a Turnkey Provider
and
Hi Everyone,
Hope Everyone is having a great day. I am currently invested in Atlanta, Birmingham and Dallas markets. I am looking for PM and TKP in Cincinnati market.
Please let me know if you can recommend anyone.
Regards,
Alpesh
Working with a Turnkey Provider can be a great way to earn passive income.
I always suggest making sure they are a REAL Provider. They should own the property first, renovate it, sell it to you with a tenant in place, and do all of the management in house. The only third party involved should be your home inspection. They should not push you off on some management company after closing.
Try looking at:
What to Ask When Working With a Turnkey Provider
and
Personally, I have seen conflict of interest so I don't keep PM with the TKP. I prefer to have third-party PM which is chosen by me.
@Jad Boudiab - although I'm sure your business model may be sound, it's quite a stretch to say that it is leaving more value and equity. The investor is making a one-time purchase (no volume discount) that is PRE-rehab. So, they're taking all the risk. Then you provide construction services, clearly at some sort of markup... and that rehab is not standardized, as you're now working with the investor on what they want, (which may not always be the same thing as what's best for that market). This will ALWAYS make the rehab cost more. Then you provide management services, at some sort of markup.
Conversely, we (as a TK) go out and buy in volume. We get discounts up front....rarely buy off the MLS. In some cases, we pay less than local wholesalers. We only buy vacant properties. We then do a STANDARDIZED rehab with TWO outside inspections...one before, one after. We do so many of these (and warehouse our own regularly used materials), that most of our rehabs come in at HALF the price of what a decent contractor would charge us. We then place the tenant, and give a warranty on the rehab done. We then take a small markup for the entire process, but that markup is NOT felt by the investor due to our economies of scale. And, although we have in-house management, we certainly will entertain investors like @Alpesh Parmar who may want to use an outside company (although our in-house team will ALWAYS charge less maintenance costs). In essence WE have taken ALL the risk up front. We've even placed the tenant - and didn't adopt someone else's nightmare. The investor is simply walking in to an already performing property without the inherent risk of buying and rehabbing.
As @Milton Marcelin pointed out, there are some unscrupulous providers out there, but there are some darned good ones too. Just like in any industry. You've got to vet the ones out that don't make sense for you to work with. We are Indy only, but in Birmingham, Spartan is a an excellent outfit, and although he doesn't do the work himself @Antoine Martel may be able to find you some good TK stuff in some of the other cities you've mentioned.
Good luck!
@Milton Marcelin
Thanks for your experiences. The "Turnkey" industry has significant bad players within their ranks. Many of these investments will end up being mediocre. Putting together investments yourself, as you suggest, will result in better profitability.
@Jeff Schechter it sounds like you're running a solid operation, here's where we part ways.
The Buyer
My client is a value-add investor in growth phase. Think BRRRR model, continuous value-add, refinance, then repeat until the investor reaches his or her goal.
Your client (TK buyer) is an investor paying retail prices with no room to force equity, and very often paying a premium for a nicely rehabbed and tenanted property. This is generalizing, I know, but still non-congruent with a value-add investor.
The Concept - Room to add value
I'm an investor myself and I value the efficiencies your model provides, but I'm also a realist. Meaning, I see how your model may add value through bulk buying and process efficiencies (kudos to your COO / operations team), but let's get real here.. You mentioned your turnkey markup is NOT felt by the investor, which may very well be true and deserves a commendation, but what percentage of the turnkey providers out there are as efficient and can meet this markup cap? What percentage of those turnkey providers' markups are NOT felt by the investor? And out of that small percentage, how many are willing to leave equity on the table and sell below market value?
Even with the scale and efficiencies, I'm still paying retail prices. I highly doubt a TK provider is consistently taking on the risk of buying the property, rehabbing it, and still reselling at less than market value. Few can carry this out without going sideways, there's still overhead the company needs to cover. Thus, I say, turnkey leaves less room for equity. That's why it's turnkey, it's a done for you operation, investor pays retail for the service, and it's a great service for the ideal turnkey investor, but it's not for the value-add buyer in growth phase.
The Operation - Economies of Scale & Efficiencies
The bulk buying of properties is an ultimate advantage for a turnkey provider, this is the biggest value-add in the entire business model. No one can compete with you here aside from the well-funded investor that can buy in bulk directly. This is an establish investor, odds are they're not buying from either of us, they have their ducks in a row to replace our role of buying, managing their rehabs, and possibly even managing.
The rest of the process efficiencies such as bulk buying of construction materials and passing on the rehab savings is a benefit, but this one is common among most operators and property management companies, not strictly turnkey providers. Our small construction markup is merely a project management and inspection charge to carry out the project and ensure the work is completed up to our standards.
We're a management company first, not a construction operation. The process is no different from hiring a GC, except our cost on materials is lower, and we get the best price from our sub-contractor teams who are carrying out 5-8 projects for us every month. It's fair to say we're in the same ball park on construction savings, this isn't a turnkey exclusive deal. The more efficient a company can become, the more value it can bring to the investor. I would question the system's integrity if these cost savings aren't sought after, or better yet they're being achieved but not passed along to the end buyer. That's both during the rehab, or on maintenance.
Buying Right is Everything
Our investor can buy at a Sheriff Sale, through a wholesaler, right off the of the MLS, direct from seller, anywhere. Our model is not for us to profit on acquisition, that's a losing game especially with a single-family investor. What's 3% on a $45,000 purchase? Our wholesaling connections make 5 times that amount per deal, we obviously would be in the wrong business.
Here's a scenario - investor buys deal on or off-market for less than market value, gets a rehab estimate prior to closing (except Sheriff Sale acquisitions, that's a site-unseen purchase), we carry out the rehab at lower than average rates, and manage the property long-term. We're interested in the long game, not the 1-2 year management contract that disappoints the investor (this is way too common in management).
The model leaves room for the investor to increase their equity in the deal, so long as they're buying right. This is the only way we can do more deals together. Otherwise, the investor would have to be well funded to pay retail every time, and the only way to grow is through their own capital and not real estate value investing.
Is this model always perfect? No, it's tougher to find such deals and it's too much involvement for someone who wants to be more passive. It's certainly more risky than a done for you operation from start to finish. That's normal, more risk, more reward.
The Bottom Line
The same principal still applies, regardless of the model, regardless of whether you're in Indy or Cleveland or any other market. If you're playing the long game, providing real value and your business model is sustainable, you will make it. Your clients are regarded as somewhat of a partner, rather than a one-off transaction.
It's evident your organization @Jeff Schechter is not around to make a quick buck and get out, otherwise you wouldn't invest in the systems and people to make your model efficient and sustainable. I'd love to hear more about it maybe off-line someday, I'd shoot some holes into your model, and you do the same, as it seems we're both on similar paths.
I am curious what is cinsidered turn key and a fair value with management in place?
@Michael Tempel Everyone has their own definition of turn key, but ours is that 1. The property has been fully and recently renovated to consistent rehab standards, there is a qualified tenant in place and the property is under professional property management. There are some companies that call themselves turn key but require you to pay for the renovation up front and close before the renovation is complete. That is not turn key at all and you take on all the risk. As far as fair value, you should not have to pay over market value. That's because as @Jeff Schechter points out, turn key companies are buying further up stream at better prices than an individual can on the MLS. They also have economies of scale when it comes to the rehab. They work with the same crews and have better control of quality and labor costs. By standardizing and buying in bulk, they are able to reduce material costs. No one should assume that they can out a team together and do everything remotely and have built in equity at the end. There's a lot of moving parts and margins are getting thinner. Everything has to go exactly as planned to have equity left in the deal and things rarely go exactly as planned.
@Jad Boudiab Thanks for the clarification. Seems like you too are running a tight operation. The nerve with me gets struck when all the TK providers get lumped into this "Paying a premium" or "paying retail" narrative, and it's not always true. We deal mostly in C-class, and in the lower price points, there is zero margin for error. We get 3-4 investors per week reaching out to us, trying to leverage our services for their "value add" because they've tried to do it themselves and failed (after reading a famous book that is promoted heavily on BP). We often tell them to stick to A/B class where there's more meat on the bone (and more exposure), so they can find that forced appreciation.
@Alpesh Parmar what made you choose those markets?
We have a family owned and operated PM group here in Cincinnati. If want reach out and we can talk over your needs. We also help with buying and selling in this market. Reach out if you have any question.
Cheers!
George Emmons
There are several Turnkey providers in Memphis TN. My definition of a true turnkey provider is they have been in business for years, and have a in house property management company, and provide a true full renovation meaning they take care of the cap ex like roofs, water heaters, HVAC's along with a full cosmetic rehab.
Vet the company check out their google reviews visit them see if they are operating out of their garage or have a team who can handle your business.