Milwaukee, WI · Member since 2018 · 8 posts · 0 votes
As someone new to real estate investing, there are some people who advised that an easy way to get started is buying a property from a legit turnkey company.
1. For all you experienced investors, have you purchased from a turnkey provider? If so, what was your experience?
2. How did you obtain peace of mind that the turnkey provider was legit and was actually providing a quality, cash flowing property and not stiffing you?
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
7y
I started buying turnkeys in 2011 and they've been my primary focus over the years. My experience has been a learning one, but overall I'd still choose the turnkey route over other routes (as I'm on my way out to deal with a property I'm currently landlording....GROSS).
The peace of mind shouldn't come from the turnkey provider or guessing that everything is legit. There's very little you can't verify about a property, and turnkeys are no exception. Working with a good, legit turnkey provider will just make your experience nicer and smoother (hopefully) and is safer for new folks who don't know what to look for. But technically all of the verification of the property and the cash flow should come from your own volition-- verifying rents and lease agreements, property inspection, deed/title insurance, comps, etc.
As someone new to real estate investing, there are some people who advised that an easy way to get started is buying a property from a legit turnkey company.
1. For all you experienced investors, have you purchased from a turnkey provider? If so, what was your experience?
2. How did you obtain peace of mind that the turnkey provider was legit and was actually providing a quality, cash flowing property and not stiffing you?
Thanks everyone!
There are several turnkey providers who've been in the business for many many years & have transacted millions of dollars worth of transactions. If peace of mind is your #1 goal I would suggest working with one of the bigger longer standing companies. It would be impossible to be doing that much business if you are just ripping people off. Where people end up getting ripped off is when they go with a fly by night outfit who's cheaper or sold them a bill of goods. Don't cut corners when this much money is on the line.
On top of that you want to do your due diligence when buying properties out of state. Make sure you get a 3rd party appraisal & inspection whenever you buy something site unseen.
As someone new to real estate investing, there are some people who advised that an easy way to get started is buying a property from a legit turnkey company.
1. For all you experienced investors, have you purchased from a turnkey provider? If so, what was your experience?
2. How did you obtain peace of mind that the turnkey provider was legit and was actually providing a quality, cash flowing property and not stiffing you?
Thanks everyone!
Google! It can be great to find out reviews or other information about a company. Also, if you know their name, ask here on the forums. Chances are, if they are legit, you will find some investors who have worked with them before. You could always search their name in the forums as well and see what people are saying about. Find former or current investors and reach out to them!
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
7y
Yes, started investing with turnkey back in 2012, and I have also helped a number of other investors do the same. Given my circumstances at the time, it was a great way to get started in OOS REI.
Investor · Oakland, CA · Member since 2016 · 171 posts · 63 votes
7y
That's the beauty of the internet! Look at reviews online and talk to other investors. Learning from others is key. I also recommend attending meetups in your local area (if you haven't already) and start connecting with local investors.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
7y
I started buying turnkeys in 2011 and they've been my primary focus over the years. My experience has been a learning one, but overall I'd still choose the turnkey route over other routes (as I'm on my way out to deal with a property I'm currently landlording....GROSS).
The peace of mind shouldn't come from the turnkey provider or guessing that everything is legit. There's very little you can't verify about a property, and turnkeys are no exception. Working with a good, legit turnkey provider will just make your experience nicer and smoother (hopefully) and is safer for new folks who don't know what to look for. But technically all of the verification of the property and the cash flow should come from your own volition-- verifying rents and lease agreements, property inspection, deed/title insurance, comps, etc.
Property Manager · Pittsburgh, PA · Member since 2012 · 267 posts · 136 votes
7y
I think any strong due diligence with a service company entails speaking with their current clients, multiple clients that have owned multiple properties for a number of years from the provider.
Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
7y
Disclosure: I am a partner in a successful TK operation in Indy.
It's amazing to me how few people will actually take the time to get on an airplane and come see what we're really up to.... Look at properties, drive the neighborhoods, understand the processes. For an initial purchase, this should be mandatory due diligence.
That's the beauty of the internet! Look at reviews online and talk to other investors. Learning from others is key. I also recommend attending meetups in your local area (if you haven't already) and start connecting with local investors.
Looking at what the reviews actually say is big too. Don't just brush over negative reviews without looking into them. Sometimes a negative review is actually good for you the investor.
If you see a property management firm with a ton of tenant complaints along the lines of
They increased my rent
They slapped me with a late fee
They evicted me immediately without giving me time to catch up
this shows that the management company is working in your interests & you can trust the operation. Other types of negative comments are a big red flag. For instance the multiple threads about Ocean Point Property Management & Morris Invest have much different negative comments. Those comments tend to focus on the company selling investors properties that were supposed to be rehabbed & never were etc...Much different.
Investor · Parker, CO · Member since 2016 · 550 posts · 389 votes
7y
@Christopher Townsend one recommendation is to ask for referrals and talk to some of the clients that have done deals with the turnkey provider you are considering. If the company isn't willing to do that, it may be a sign they are hiding some skeletons in the closet. I also agree with @Jeff Schechter - get on a plane and go see the operation, meet the team, see the neighborhood, and the typical property type they are selling. Also talk to the property management company they are using because property management can make or break your investment.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
7y
1. Most of my properties have been through turnkey. First one was in 2011. I've learned a lot from them (happy to help you with that if you want), and made a few mistakes with them, but ultimately I still prefer them as my method of investing.
2. You absolutely don't have to trust the turnkey provider (and shouldn't) because you should be doing full due diligence on the property during the buying process. Things like property inspection, etc. All of that should confirm you're getting what was advertised. Life will be a lot easier if you work with a trustworthy turnkey provider, but you shouldn't trust any of them to tell you the condition of the property and the situation when you should be checking up on all of that yourself. There's very little about a property that you can't verify.
Investor · Parker, CO · Member since 2016 · 550 posts · 389 votes
7y
@Ali Boone you mentioned that you made a few mistakes with turnkey companies. Would you mind giving some insight into what those mistakes were? I'd love to learn how to better serve our investors and not make similar mistakes.