All Forum Posts by: Chris Clothier

Dawn A. - We started our company in much the same manner as the statement you made above. We were doing something for ourselves and it evolved into doing the same thing for others. Back then, we had no idea what Turnkey was and that name just became synonymous with what we (and other companies around the country) were doing.

We had a lot of experience as business people so we were able to look at the traditional way of doing things like property management and a lot of experience with sales and were able to develop processes to grow our business. Those are the only two cautionary notes I can give you if you want to start offering your service - regardless of what you call it. We had a great deal of prior experience with building businesses. Everything that David Beard wrote about the in-depth and multiple tasks involved with such a business is accurate. It is not simply buying, renovating, renting and selling. There are a lot of moving parts even if you are only doing a handful of deals a month. And most of what has made us successful has to do with business experience not because we had a real estate background.

Lastly, we do not spend any time with foreign investors. We looked at the numbers and for us, it did not make sense. There are millions of U.S. real estate investors and many, many more investors who are interested in using real estate to diversify. There is no reason at all that you could not build a Turn-key company in Milwaukee if you offer a quality product and have good business acumen and business integrity. In fact, I'm sure you could start with investors right there in your area. So worrying early on about travel and events and even foreign investors should be secondary. First and foremost it should be about whether you can offer a product to a local investor that you would be proud of.

We would not even exist today if it had not been for local investors, who knew us as a smart business family, asking us to help them get started. That is the only reason we even started building this company. There was a need for it and they asked us to help.

If you have the desire and are willing to work at it, I think you could build a small company and who knows what you could grow it in to. I'd be happy to help you in anyway I could as you got started.

Shari Posey, we got off of your original topic a bit! But hopefully through all of this discussion you can see that there is a lot of thought that goes into operating a company like this and just like any industry there is good and bad. Your concerns and original question were valid, but I do know that if you want to invest in other areas that allow you to diversify out of southern California and at a lower price, you can find good, quality companies that you can trust.

Jason -

David hit the nail on the head. The owner of that company is a guy named Terry Kerr. He has been an investor for about 10 years as far as I know and has a very good reputation for being honest and trustworthy. He does business in some areas of town that I am not interested in working anymore and quite frankly have not done very well in the past. But Terry knows them well and seems to do a good job.

I can tell you that when i am talking to investors that are interested in lower price points or are interested in the particular areas that Mid-South specializes, he is the person I recommend they talk to. I have not purchased from them and have not experienced their property management or service after the sale, so David makes a good point to try and talk to some investors that have owned for a few years. But I can tell you that from everything I have heard locally, he is an expert in his areas and conducts himself and his business in a good way.

Beyond that, I can;t tell you much more. Hope that helps. Good luck with your investing.

Chris

Companies can have many reasons for not selling to owner occupants or through the MLS. Usually it has to do with the dynamics of the market and the demand from owner occupants in the neighborhood. The ability for buyers to get financing can also play into the decision. All of that is going to be market by market. I think it would also be wrong to assume that turnkey companies are not using every means possible to sell properties. Many probably are selling to owner occupants and taking advantage of the MLS to sell their homes.

You asked a question earlier in the forum about why turnkey vendors do not simply keep properties if they are such good deals. Many turnkey vendors that I know around the country do keep some properties themselves, but they have access to more properties than they could possibly keep. So they are both building their portfolios and selling properties for other investors' portfolios.

Hi Shari -

Not sure if I can really add anything to your question that some of the other commenters have not already said, but your best bet is just due diligence until the point you are satisfied you are not going to be dealing with those issues. There are absolutely bad apples in the Turnkey business just like any other opportunity. Just because they are Turnkey opportunities does not mean there is any less due diligence and I would imaging that buying out of area requires even more research on your part before buying.

That said, I think the problem you are describing would be very, very rare. There are many reputable companies with very good reputations and plenty of information for you to find as a buyer at this point. I don't know them all, but I think you could find a good company in just about any major market where Turnkey investments are working.

best of luck -

Chris

Hi Melodee -

I replied to your email so you can see more details there, but we just don't do a lot of investing in this area. We are working with Community LIFT here in Memphis and one of their three zones is at the northern edge of 38109, but as a general rule of thumb - when we are reselling to another investor and retaining the management - we really don't do 38109. Occasionally, maybe, one here or there, but it is not an area that we like.

As I said in the email, it may be a really good deal, but it is not a good deal for us. There are plenty of other guys and gals in Memphis who may like the numbers and area on it and can help you - and Dean Letfus is one of them - but for me, I would not be able to help with it.

Nice job though of getting out there and finding some properties. I know this is your passion! I would be more than happy to keep helping you fine tune some areas around Memphis where we would love to buy property from you.

Good luck -

Steve Babiak - I'm not sure, but it sounds like there is some chirping going on with the other post and probably not helpful for someone who wants to work with BP to get on one of their podcasts - but that is just me.

I've been turned down for stuff on BP like ads, had articles rejected, forum posts removed and even asked to do a podcast about 6 months ago, but haven't yet. Maybe in the future. But i'm pretty sure there is no b.s. about paying for it or being in a "club" to be a part of it. So I show respect to the guys that own this site for having some integrity and treating everyone the same - even a 3 year advertiser like me.

On that note, if Michael Quarles still wants to do a Webinar or conference call on yellow letter advertising while waiting on a podcast, I'd sign up for sure.

You're right, I wasn't even aware it was posted, but I am going to check it out and read through it now.

You could be right Phillip...it's always hard to tell from writing, but I would be insulted if someone asked me if they needed to join the childish fraternity to be a part of something i do for my business. Probably more insulted if they asked if it was "quid pro quo".

The really crappy thing is I'd like to hear Michael on one of the poscasts as well.

damn dude...whats up with that insult? i actually thought the dog comments and the Fran Drescher sighting were funny, but I don't get the insult at Josh and Brandon. The podcasts so far have been pretty damn good and at least give 'em some credit for trying to offer some real content better than the usual crap on RE sites.

Keep trying to do things better Joshua Dorkin and Brandon Turner. And Rob K, there are probably a few of us who think a podcast with you would be pretty damn entertaining. A pic of you can't be that bad...

Hey Omair Q. -

From what you have shared, it sounds like you are the type of investor most attracted to turnkey investments because of your location, knowledge and time constraints. I think any of us that have been in the business of providing turnkey investments for close to 10 years will tell you it is not "completely hands-off", but it is as close to a passive investment you can get while still owning deeded real estate. Good luck with your investments.

As far as Memphis Turnkey, the owners are Alex and Benolyn Craig. I thought they were on here and couldn't get their names to come up with the alert system, but im sure you've already connected with them if you are asking. I do not know them real well although I have met Alex before and I have not heard any negative comments about them. We get a lot of transfers where investors want to move properties from one management company to ours, but I do not recall ever having one of their clients want to transfer so I would take that as a definite positive. From everything I know and anything I have heard, they are good people who run a good small company. Of course, continue to do your due diligence, but as another company operating in Memphis, I have not seen any red flags on them or their company nor have I had any other investors come ask us for help after doing business with them.

As for Marco Santarelli, I have a lot of respect for the way he goes about doing his business. I think he is a solid source of information and advice and he spends a lot of time looking at different markets around the country. His company gives out a wealth of information for investors and I personally really appreciate the open manner that he uses when giving data, info and feedback.

As for investing our of state and turnkey, so much of your success will be determined by how you approach your relationship with a provider and your record keeping. Remember, that passive investments do not mean that you remain completely passive and never check in, follow up and keep your records straight. I can tell you from experience, the investors that have the most positive experience when buying turnkey out of state are the ones who build strong connections with the company they are doing business with and are comfortable asking tough questions. The strong relationship keeps you connected and informed and the willingness to ask tough questions keeps the relationship on an appropriate level where the company always knows they work for you!

Best of luck as you keep moving forward and get started. I love that you found BP and are getting active and asking questions on here. This site is THE BEST place to get the answers you are looking for.

Chris