Turnkey Nightmare: Property Manager Ignored My Warning About a Missing A/C…

[Thomas Beard]

I’m looking for guidance from more experienced investors on how to handle this situation.

About a year ago I purchased three turnkey rental properties in Memphis through an out-of-state turnkey company. Initially everything seemed great. The purchase process was smooth, the properties rented quickly, and the company had strong reviews and presented themselves as a professional team that handled everything.

However, once the properties were under management, things slowly started to unravel.

I began noticing frequent errors in the property management accounting. I found myself reviewing every transaction carefully and contacting them regularly to correct mistakes. I understand the concept of “managing the manager,” but the number of issues felt excessive. My point of contact was also very difficult to deal with there was never any ownership of mistakes, only excuses.

Around the middle of the year the management company switched to new software, and it was clear my point of contact didn’t know how to use it. That created even more confusion.

At one point I was on the phone with the managing partner for something unrelated and respectfully shared some of my concerns. It seemed like they were heard at the time.

Then things took a turn.

About a year after buying my first property, I received an email offering a $175 annual property inspection. I agreed. When the report came back, it wasn’t really a report just a collection of photos.

While reviewing the photos, I noticed something strange: I didn’t see an A/C condenser anywhere.

I’ve never visited the property in person, but I had a good idea of where it should be based on previous photos. It wasn’t there.

I emailed my point of contact and told her I believed the condenser might have been stolen. I also asked for someone to go back out and confirm whether it was actually there.

Her response was basically:

• The inspector didn’t say it was missing.
• The tenant hadn’t reported any issue.

She also told me that the company was no longer doing the HVAC inspection and filter program I had originally signed up for when I bought the property.

Not satisfied, I called the managing partner directly and explained the situation. His response was essentially:

“It’s April in Memphis. If the tenant didn’t have an A/C condenser, we would know about it.”

Since I live nowhere near Memphis, I was relying on their expertise. I let it go.

Fast forward one year later.

My previous point of contact had been fired, and I was assigned a new one. I agreed to another annual inspection.

This time the report clearly stated:

The A/C condenser is missing.

At this point I was furious.

I immediately contacted the property manager and asked them to file a police report so we could submit an insurance claim. Their response was that too much time had passed to file the report or an insurance claim.

In my view, the only reason time passed is because the issue was ignored after I brought it to their attention the year before.

After escalating the issue, the management company said they would cover some of the replacement cost, but that the condenser itself is ultimately the owner’s responsibility.

Meanwhile, the managing partner who said he would call me still hasn’t.

From my perspective this seems pretty straightforward:

• The inspector failed to identify the missing condenser.
• My point of contact dismissed my concern when I flagged it.
• The managing partner dismissed it as well.
• Their negligence prevented a timely police report and insurance claim.

Because of that, I believe the management company should cover the full cost of replacement beyond my insurance deductible.

At this point I’m honestly feeling defeated and considering terminating the relationship entirely.

My questions for the community:

1. Am I being unreasonable expecting them to cover the full replacement cost?
2. Has anyone dealt with something similar with a turnkey provider?
3. What leverage do I realistically have here?
4. Would you push harder, pursue legal action, or just move on and change property managers?

Any advice would be greatly appreciated.

[Jay Hinrichs]

U can file a police complaint anytime.. thats BS about to much time.

u cant expect the PM to pay anything for the condenser it was stolen. which is common in many areas of the deep south and if you dont have it caged when you replace it put a cage around it.

One of the identifying factors when buyer these type of homes in these type of rental areas is cage on condenser and bars on windows and doors.. this will tell you the type of neighborhood your buying in. purchasing 3 homes with out going there is pretty wild in my mind. U want to get a feel of the streets not jsut the front of the house