Keys to purchasing the right turnkey?

Question

Weighing the options of buying turnkeys due to a full time job taking up the entirety of my work week. I’ve heard a lot of bad things about turnkeys, but there has to be some good to them.

James Wise · Answer

Some best practices for you to keep your money as safe as possible when going the turnkey route are as follows

Account Closed · Answer

I would suggest looking at Turnkey Reviews, which is a site Jay Hinrichs and Brie Schmidt here on BiggerPockets put together.

Jeff Schechter · Answer

@Lucas Schneider  There are good and bad in every industry.  Aside from the obvious checklist items that @James Wise points out, it's also a good idea to actually meet the people you want to do business with.  WHO you are doing business with is just as important as WHAT you are buying.

A couple of other items of note... if the TK company offers some sort of guarantee on their rehab, that's a good thing.  It means they stand behind their product.  If they offer a rent guarantee, they are guaranteeing human behavior, which is not something anyone can/should be doing... it just means they have enough markup in their product to cover it.

Lastly, learn the difference betten a TK PROVIDER and a TK PROMOTER.  One will typically come with an additional layer of markup.

Good luck!

Charles Faul · Answer

@Lucas Schneider. Hello Mr. Schneider ,   If the number are good and appreciate a little in value and you are coming out with a nice net profit , why not. Also suggest you learn a little about electrical, plumbing , carpenter, everything about the property that you can . You would be surprised how many times there is a service call that you would be able to fix on the phone , and I am not saying you need to fix everything yourself , but by being educated in those areas, can help deal with your professionals .  Always ask the professionals what was the fix and how they fixed it will help you a lot . It is really not rocket science , and never , ever let someone tell you cannot do it . If you are sincere, tell the truth , you will also find old men like me that would give a young , hard working person a chance and help you with a deal, so never give up .  Thanks

Greg Dickerson · Answer

Yes thanks

Greg Dickerson · Answer

@Lucas Schneider not all turn key companies or properties are equal. Don’t get lured in by cheap prices as they can be headaches.

Also if your going turn key you should check out short term resort rentals like on the Outer Banks of North Carolina. These are the best turn key properties you can find. No collections, evictions or vacancy. People book in advance and the PM companies handle everything.

Downside, they usually are not cheap. Most markets you will need to start around $300k and up but the larger properties are like multifamily without the headaches and competition to maintain occupancy.

Jeff Ronningen · Answer

@Greg Dickerson.  I think you meant “aren’t cheap” about outer banks NC

Mark Durham · Answer

Nothing inherently wrong with Turnkey IMO. Just have to do your due diligence like any other deal.

Stick around long enough & you'll hear good things & bad things about every type of deal.

Keys to purchasing the right turnkey?

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