Turnkey Property Selling Advice Needed

17 Replies

I have a few properties in Memphis, TN & Houston, TX that I have done all the repairs and even rented the units out at generous 10% + ROI. I am looking for anyone interested in Turnkey properties. What are some ways to find turnkey buyers. I am use to wholesaling and finding other investors who want deep discounts 60 - 70 % off ARV. But now that I have rented the units out, done all the repairs and put a property management in place where do I find these types of buyers who solely want to buy based on ROI? Also what kind of offering should I give. Please advise!

Here is one property that I have that's available

7922 Midland Forest Dr, Houston TX 77088

My Price is $120,000

It currently rents for $1300 Month
Taxes $2000 Year
Insurance $1800 Year
Property management $130 Month
HOA: $300 Year
Neighborhood B+

Here are the numbers using Biggerpockets Calculation

http://www.biggerpockets.com/buy_and_hold_results/...

Am I offering this at a great deal to a turnkey buyer?

I'm having trouble with Zillow not listing the sale prices of nearby homes in the neighborhood.  That would help me determine if the comps support the price.  Unfortunately, every "sold" house I click on says the sold price is "N/A".  Maybe that's just a Houston thing or Texas thing?

@Geoffrey Jones

One challenge you might face is that though the homes are technically TK ready, you yourself are not a TK company like many others are so some buyers might not feel as comfortable in dealing with an individual as opposed to say a TK company provider. 

Just something to think about.  Good luck!!

Medium buymemphisnow stacksCurt Davis, Buy Memphis Now | [email protected] | 605‑310‑7929 | http://www.BuyMemphisNow.com

Originally posted by @Randy E.:

I'm having trouble with Zillow not listing the sale prices of nearby homes in the neighborhood. That would help me determine if the comps support the price. Unfortunately, every "sold" house I click on says the sold price is "N/A". Maybe that's just a Houston thing or Texas thing?

Zillow is like that for most of Houston. Not sure why though. I have comps that I can share located here. 

http://wholesaleproperties.investorwize.com/p/3051...

In the middle of the page there is a link to see the comps I found

From prior appraisals and comps property will appraise for $115000 - $130000. On the really low end of the stick properties that need repair are selling in the 70 to 80000's. I personally give it an estimate of $115000.

Originally posted by @Curt Davis:

@Geoffrey Jones

One challenge you might face is that though the homes are technically TK ready, you yourself are not a TK company like many others are so some buyers might not feel as comfortable in dealing with an individual as opposed to say a TK company provider.

Just something to think about. Good luck!!

How does one become a reputable Turnkey provider or even work with one. What would compensation and the agreement be like working with an existing turnkey provider if possible?  I have a team put together so its not a one man show on my end but trying to break into this if possible as we continue to grow.

Originally posted by @Randy E. :

I'm having trouble with Zillow not listing the sale prices of nearby homes in the neighborhood.  That would help me determine if the comps support the price.  Unfortunately, every "sold" house I click on says the sold price is "N/A".  Maybe that's just a Houston thing or Texas thing?

 Texas is a non-disclosure state.  You will only be able to get sold data from real estate agents in the state.

@Randy E. Texas is a non-disclosure state so sites like zillow have a hard time getting sold comps in Texas. The realtors associations control the comps so you need to have enough rapport with someone who has access to sold MLS comps in Houston to get the real comps.

@Geoffrey Jones I am calculating about a 8% ROI on your deal before maintenance and vacancy. Your taxes look low as the tax rate in that neigborhood is 2.77. I think you need to be around $100k to be at 10% before maintenance and vacancy. Depending on condition the house is probably worth $115k based on the comps I've seen. It just might not be worth that to an investor.

Originally posted by @Waylon Themer :

@Randy E. Texas is a non-disclosure state so sites like zillow have a hard time getting sold comps in Texas. The realtors associations control the comps so you need to have enough rapport with someone who has access to sold MLS comps in Houston to get the real comps.

@Geoffrey Jones I am calculating about a 8% ROI on your deal before maintenance and vacancy. Your taxes look low as the tax rate in that neighborhood is 2.77. I think you need to be around $100k to be at 10% before maintenance and vacancy. Depending on condition the house is probably worth $115k based on the comps I've seen. It just might not be worth that to an investor.

Based on your opinion what would be a good price to list this at for a turnkey investor?

Should I revise the price to $100000? I want the investor to have a good deal but I also want to be profitable. Considering ALL repairs are done, the house is in pristine condition and already rented out and with a valuation of $115,000. 

Also I am trying to reach out to turnkey buyers. What are some strategies to reach out to them?

@Geoffrey Jones , Like it was mentioned before, not being a turnkey provider it will be harder to get top dollar for a turnkey property.  I do not believe that is because of trust.  An investor can verify numbers and have inspections done to check the property's condition.  Your biggest issue will be not having the network of turnkey buyers that professional turnkey property sellers have.  Some landlord buyers pay as much as 80-90% value (which is crazy to me), but you have to find those buyers first.  

@Sandeep S. and @Johnson H. ? Houston is your turf......I think.  Any inputs, or are you interested in it yourself?

@Geoffrey Jones If you don't have have a good buyers list, your best avenues are either a) list on MLS with a discount agent such as @Huy N. to blast out your property to his buyers list for a fee. C) work with your manager empire industries and have them blast it out for a fee.  C) is likely the best option since their management agreement with you likely states that you have to pay them commission if the property sells during the lease.    The lower you go on price the faster it will move but you don't want to drop $15k off your price just to move it when there might be ways to move it at $115k.  I would talk to Steve Rosenberg if I were you.  I tried to link him but it wouldn't let me.

Hi Geoffrey, there are lots of buyers just on BP lurking around. I would post on the market place! At $100k, I was very interested until I saw the somewhat high HOA fee and pool. If you have anything else without a pool in a good school district, I would be interested at a good price.

Thanks for the tag @Minh Le . @Sandeep S. would be very interested at the right price, I would be fighting him for these properties I bet. 

Originally posted by @Waylon Themer :

@Randy E.Texas is a non-disclosure state so sites like zillow have a hard time getting sold comps in Texas. The realtors associations control the comps so you need to have enough rapport with someone who has access to sold MLS comps in Houston to get the real comps.

@Geoffrey Jones I ar.  

 Thanks for the info, Waylon.  The more I learn about Texas, the more I realize it's almost like a separate country.  ;-)

Originally posted by @Johnson H.:

Hi Geoffrey, there are lots of buyers just on BP lurking around. I would post on the market place! At $100k, I was very interested until I saw the somewhat high HOA fee and pool. If you have anything else without a pool in a good school district, I would be interested at a good price.

Thanks for the tag @Minh Le. @Sandeep S. would be very interested at the right price, I would be fighting him for these properties I bet.

I buried the pool 4 months ago. So the pool is gone!

That leaves more room for more profit to the investor.

Originally posted by @Johnson H.:

Hi Geoffrey, there are lots of buyers just on BP lurking around. I would post on the market place! At $100k, I was very interested until I saw the somewhat high HOA fee and pool. If you have anything else without a pool in a good school district, I would be interested at a good price.

Thanks for the tag @Minh Le. @Sandeep S. would be very interested at the right price, I would be fighting him for these properties I bet.

I buried the pool 4 months ago. So the pool is gone!

That leaves more room for more profit to the investor.

Originally posted by @Minh Le :

@Sandeep S. and @Johnson H. ? Houston is your turf......I think.  Any inputs, or are you interested in it yourself?

I think you have got pretty good advice already.  While I am a very active buyer in Houston, I do not buy Turnkey (nor do I sell Turnkey).  So I don't have first hand input. 

I will add couple of things. For a property that is rehabbed and rented at $1300, I expect established TK providers would sell it for ~$120K. Now given that you are not established - you should try to sell it at a bit less. Say $115K. At $100k-$105K - I think you will be giving it away too cheap. But if you are in hurry - that's the price range. Otherwise, I'd say try listing it at BP, Craigslist, FSBO sites, etc. for $115K.

However, as @Waylon Themer mentioned - if your lease agreement with Empire says that you need to pay them commission anyway to sell - you might as well list it on MLS with them.

Your decision needs to be based on whether you want to become a serious TK provider or this is a one off sale you want to do.  If you want to be serious TK player - you obviously will have to do a lot of initial effort and investment until you become "established TK provider". 

I'd talk with local property managers in the area and tell them what you have. You can also list it on the MLS and see what kind of bites your get.

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