Turnkey: market or provider?

Question

Hi BP, I'm new to REI and have been researching REI for the last 8-9 months. A recent BP Rookie podcast talked about buying turnkey properties. I'm curious to get some perspective from folks who've gone this route for their first investment (especially those going OOS). Did you identify a market first and then look for a quality TK provider or did you find a quality TK provider to then help you identify a market?

Some context if it's helpful:

I live in CA and my first investment will need to be OOS. I've found myself pinned with analysis paralysis as I've tried to identify a market that makes sense for a first purchase (my aim is buy and hold). As a first time investor going OOS and lacking experience with renovations/rehab, the process of figuring all of that out from afar is daunting and I feel like I'm never going to get comfortable with the prospect of doing that with my first REI. The prospect of TK seems to minimize some risks (I realize no investment is not without risk) but I want to get a better understanding of how other folks have approached this equation.

Much appreciated, BP!

Dan

Zach Lemaster · Answer

@Dan Riley

Excellent!  We look forward to speaking with you.  Someone from our team should be in touch shortly.

Zach Lemaster · Answer

@Dan Riley

Thanks for the interest.  There are many different options to invest & providers out there.  It very much depends on who is the best fit for you in terms of location, value the organization brings to the table, and what options are most compatible with your investment goals.  If you have any questions at all, feel free to reach out at any point in time.  It is important to recognize that you can have the best property in the best market, but if you don't have the right team to ensure the long term performance of that property, it likely will not be a successful investment.  Here are some links to review as well to give you more information.

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

Dan Riley · Answer

@Ali Boone and @Jeremy Wirths thanks for sharing your thoughts. Super helpful and much appreciated. Do you have any recommendations on TK providers? I’ve heard good things about Zach Lemaster at Rent to Retirement, but curious if you have any additional outfits I should look into. Thanks!

Dan Riley · Answer

@Zach Lemaster Thanks for the resources! I dropped a note/interest form on your page this morning. Looking forward to learning more!

Ali Boone · Answer

Yeah, happy to chat anytime about companies, and I also run a turnkeys Facebook group where everyone talks about different companies and shares experiences.

Jeremy Wirths · Answer

@Dan Riley I second what @Ali Boone said. You'll want to do your research on the provider first then the market. The provider, like the PM company, will be a huge factor in the success you have in the deal.

Ali Boone · Answer

Hey Dan. My first successful investments were turnkeys. Started buying them back in 2011 and have worked with them ever since. As far as choosing market vs. provider first, I would advocate to find the quality providers first, and then analyze the markets they're in. I feel like that will be more efficient because you could spend a lot of time analyzing markets, only to decide on a bunch of markets that end up not having quality turnkey providers in them. Whereas if you start with the turnkey providers, you know those are there, and then you can just say yay or nay to the market(s) they operate in.

This is an old article and doesn't really say which comes first, the chicken or the egg, but it does talk about choosing a turnkey market-

https://www.biggerpockets.com/...

Usually analysis paralysis stems from having too much information that you don't know how to interpret. Someone can collect all the stats in the world, for example, but if they don't know how to interpret them, they're useless. So it takes getting a broader picture understanding of what you're looking at, expelling any fears, and then just being willing to try a deal, knowing it may not be perfect right out of the gate.

For turnkey help, I run a turnkeys Facebook group and help folks with turnkeys all the time. Shoot over any questions if you want!

Account Closed · Answer

Personally i found a provider i trusted first and foremost

Turnkey: market or provider?

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