Turnkey fees

[Alex Yaro]

Hi, I am looking at properties in  Memphis, TN and/or Middletown OH (based on recommendations of reputable Turnkey operators: MidSouthHomeBuyers and Missy McCall.

My first question: are both operators as reputable as I have heard?

My second question relates to fees:  I calculated the annual equivalent of 

- move-in fee (1/2 of rent)

- annual maintenance of A/C & furnace: $85

- management fee 10%

- lease renewal fee $200 (every year)

- rehab fee (when tenant leaves) $600

- vacancy (1 month / every 1.5 yrs)

- 10% repair accrual

After all these fees, my Cash-on-Cash return seems to be 5%, not the 15% top line that just looks at the monthly rent and mortgage payment.  Am I being too conservative?  Are the fees too high?  One point the MidSouth person told me is they don't mark up materials like other operators.  This may be an important point - I could really get hammered if I don't know the cost of hammers in TN.

I welcome all thoughts/suggestions/advice.

Thank you.

-Alex