RE Investment PM company experience?

[Kevin Lee]

Hey all,

I'm new to everything here but we're finally in a place where we can afford to start looking for a property or two to invest in. We're looking in the Las Vegas, DFW or Orlando area as out of state investments.

Through BP, I've noticed that we can use a PM company that is geared towards real estate investment/investors.  Basically, they find the property for you to buy and then place a tenant in there. They're able to show how the property would cash flow and break everything down.

To me, as a naive new investor, this almost seems like a no brainer.  Sure, I may lose money on the PM fees but the peace of mind sounds nice? We're looking for the long run, not quick money. Almost sounds like robo-investing to me, especially with finding a property to buy.  (Anyone know what they typically charge for a finders fee?)

Any advice would be really appreciated!

[Account Closed]

@Kevin Lee, it sounds like what you're describing is a form of Turnkey provider. The term turnkey can mean a range of things, but on a general level, it often involves a company that has or finds the rental property for you, then may find tenants, and then may also have their own property management branch to manage for you. This isn't necessarily a bad strategy for newer investors or those who really want more hands off, but there are some things to look out for: 

First, the fees can vary. They might charge a mark up on a property coming right off the MLS, then also charge to place a tenant, and then a % for PM. Additionally, be cautious with just taking their #'s for granted. Some turnkey providers will inflate #'s or make a neighborhood sound nicer than it is.

That said, there are plenty of people on these forums and podcasts who have started with turnkey and have good things to say. Consider doing some research on the company you're considering and don't just speak to people who work for it.