first investment (turnkey?)

[Mattia Marini]

Hello!

i'm a newbie from Italy.

I've been listening to the podcasts and looking around in the blog for the last 2 months, so I at last decided to write.

i'm currently about to finish university, and starting my own business.

i have saved up some money for me to create some kind of passive income, and after screening various possibilities i've decided that i want to invest in RE.

my idea was to go into rentals, but my sitaution right now is that my business seems to be close to take off and in that case i would have to start put more time into it and travel around the world, so i wouldn't be able to be present as a landlord (for this i'd have to clarify that in italy we don't have property management companies, the position just doesn't exist, or so it came up in my research).

I did some more research and i aimed more to turnkeys in Europe, since i still want something kinda close that i could go and visit for a weekend if i ever wanted to.

i did find a few companies that propose turnkey property but here kicks in my italian distrust :

i found deals for 45-70k for service properties (specifically units in hotels an care facilities)

the website advertises 10% NET ROI GUARANTEED (in some for 10 years in some more)

it GUARANTEES as well a buy back option from the developer after 6-10-15 years at 110-125% of the purchasing price.

now the deal seems legit, i can kind of understand that if p.e. the hotel i'm investing in pays 500/month to me for the rent, then he sells the single room for much more, thus their gain.

i run the numbers, and here's what's throwing me off:

it really seems too good to be true.

i've tried to do some digging but i didn't find any information on any blog about this company, and the company doesn't list any reference for privacy policy (they say they provide some upon request).

now after all this,

do you have some tips about how to do some kind background check on the company/deal through internet or other means..?

thanks in advance!

awesome blog BP!

p.s. sorry for my english :)

[Mattia Marini]

@Tom Ott thank you very much!

i'll certainly do my due diligence on the turnkey company.

all the business side of it i want to know about the company for sure, but for the property side of the due diligence, i think the position is different then one of a turnkey property of a house.

my point is that i am renting out to someone that uses the room as a business so even if the PM is not inhouse i can be quite sure that it's gonna be well taken care of (their business depends on it).

they advertise that it's gonna be annual guaranteed ROI 10% and buyback option after some years.

as long as those parameters are in the agreement, i don't know what the problems might be.

i only was worried about scams, since if they can guarantee those things i don't know why they would ever sell it.

but this said, if they rent from me a hotel room at 500/month, they've got plenty of room there to get their own monthly gain.

i guess i'm just asking for some opinion to see if there is some down-side that i can't see right now.

and if you have heard before of such turnkey deals of service property units, if it's normal in the industry.

thanks!