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Updated about 6 years ago, 09/07/2018
share your turnkey experiences
i see lots of questions about turnkeys, but very few real-life experiences. (i did find one). So, for those who did buy a turnkey, would you be willing to share your story? Specifically, what did you expect? and how have those expectations correlated with reality?
I have worked with MidSouth and am currently working with them on buying a few more properties....
They have been amazing from buying the property to property management...
Sure could I make more money if I do it myself sure I can I know that... But I work a full time job and don't have time to do that.
So for me it's perfect. If anyone has some other questions for me please feel free to ask
The opportunities for turnkey now are starting to get tighter as prices start to go up. We are seeing this first hand. Of course it is dependent on the region, with FHFA lowering their min down payment requirements more homeowners will be wanting to buy instead of rent. That also presents opportunities for landlords to sell their rental properties to tenants as an exit strategy as well.
Hey guys, this thread is old, but has some great info. I'm hoping to get the conversation rolling again almost a year after the recent posts.
What type of RV ratios are we seeing in successful turnkey properties? Is the 1% rule safe? 2% rule?
Most of the properties I'm looking are priced in the upper 60k range and rent for $800-850 per month. Will that generally turn cashflow after maintenance/etc? My calculations say yes, but I'm interested to hear long term, 3, 5, or even 10 year experiences with holding turnkey properties. Anyone?
Thanks!
- Dave
@Dave Williamson, are you looking at properties in that price range in GA?
Originally posted by @Kevin Darrell:
@Dave Williamson, are you looking at properties in that price range in GA?
I've been looking in Birmingham. It's driving distance for day trips. I would like to find my own deals, but I want a few turnkeys first to build experience and confidence. I haven't seen many turnkey providers in Atlanta these days, but feel free to make suggestions.
Originally posted by @Pyrrha Rivers:
@Jay Hinrichs I'm not at home at the moment. Unfortunately I am not on site where I would have access to the best deals and have the most control. I'm in Japan trying to buy in the Atlanta Metro area or where it makes sense at this time now that the Atlanta market is getting harder. Building a team from this distance even with a daughter on site willing to help me is proving to be quite difficult because we don't have experience yet. I am considering turnkey as a way in.
Pyrrha, are you back in Georgia now? How has your investment venture been over the last year?
@Dave Williamson, The only one i've heard of is Georgia Residential Partners, i'm a newbie looking to get my first turnkey property also and they are one of the providers I was looking at being that I plan on making a move to Georgia in the coming years and have family there.
Originally posted by @Dave Williamson:
Hey guys, this thread is old, but has some great info. I'm hoping to get the conversation rolling again almost a year after the recent posts.
What type of RV ratios are we seeing in successful turnkey properties? Is the 1% rule safe? 2% rule?
Most of the properties I'm looking are priced in the upper 60k range and rent for $800-850 per month. Will that generally turn cashflow after maintenance/etc? My calculations say yes, but I'm interested to hear long term, 3, 5, or even 10 year experiences with holding turnkey properties. Anyone?
Thanks!
- Dave
Dave,
I'd also like to hear some updates on turnkey investors experiences.
Originally posted by @Dan Brewer:
Let me provide some thoughts from a lender perspective. I provide capital for a company that provides a 30 year non-recourse loan product for SF properties. I also work with a large number of investors who invest in TK properties as part of their investment strategy. Overall, its a great investment class if its approached from the right perspective and the investor is well informed, has the right skills for the investment class. I particularly liked @Account Closed stated, property management is the key.
Its not uncommon for investors to approach me and ask me to help them liquidate some or all of their SF investment properties that they acquired through other channels (I dont market or sell SF investment properties unless I am doing it as a client service, and even then its rare). There are two common themes why these investors want to sell: 1. They were not fully educated and understood all the aspects related to SF investment or turnkey properties (they were usually out of town properties), and 2. They did not understand what they were buying - inadequate due diligence was performed.
The location of the property has such a huge bearing on the performance of the property (location, location, location!). The capital I provide to my lending clients is at-risk capital, and I have a fiduciary responsiblity to my investor clients, almost all of them common everyday people like us. So I am very particular of the underwriting process of the lenders. I utilze a tool that is available to everyone called RentFax. It allows you to enter the address of the property anywhere in the USA, and provides you and index score that encapsulates the relative risk of that property location. So if you are considering properties in areas that you are unfamiliar with, this is a tool that you want to use. It considers the same variables that you and I consider when we are looking to personally live somewhere - schools, crime, services, transportaion systems, etc. The better these variables are, the higher the index score. The score is presented on a spectrum, whereby a low score (denoting a highly volatile location) is represented in the red zone, and a high score (representing a relatively stable location) is represented in the green zone. So you know very quickly what you are dealing with regarding the location of the property. I call it "The Truth".
I do want to mention that a low RentFax score does not mean it is a bad investment. It just means its in a challanging location, and is likely to attract less desireable renters, incur higher vacancy, property damage, non-pay, etc. There are many investors who are very successful with properties in undesireable locations. But most investors are not, and that is usually the properties that I get requests to liquidate.
RentFax has been thoroughly tested and has proven to be very accurate. A leading insurance company now uses RentFax to underwrite their insurance policies on SF investment properties. All my SF investment funds require it's use. You can access it through my website (www.TheCapitalMan.com). Look for the tab at the top right corner called RentFax. I make no revenue from it, but feel its a such a valuable tool for my investors.
I recently conducted a seminar in San Jose, and had many questions from investors on turnkey or SF rentals, which was not the direct topic of the seminar. The discussion reaffirmed my belief that investors in this asset class need to be better informed. Therefore, I will soon be conducting webinars on the considerations of SF investments and how they should be evaluated and managed. If there is interest, just simply register on my website (name and email is all that is needed) and let me know that you are interested in finding out about this webinar when it is offered.
Thanks, Dan
The link www.TheCapitalMan.com seems not working. Could you check ?
Anyone can access RentFax at www.rentfaxpro.com. If you can find Dan's affiliate link he will benefit from you using it but if you're pressed for time you can go direct to the app.
@Dave Williamson I am still in Japan and have managed to acquire two SFH properties thus far. Not the easiest process but I'm making it work.
Thanks for asking.
Bump. Any turnkey experience updates? I would love to hear more recent updates. Thanks in advance
I'll put in my 2¢ regarding customer service. I travel often for my W-2 job and if it leads to an area requiring more investigation on my part regarding TK, I try to visit the operation and view some properties.
I've had one hell of a time lining up visits for a recent trip to MO. I had considered putting out a blast but found someone on short notice that squelched my anger a bit. PM for details.
For those TK providers, please look at your approach to customer service at every level.
I've purchased several out of state properties through a couple of turnkey providers, so I've had some time to dwell on the experience. Be comfortable with the MSA you are investing into. Then be confident in the property you are purchasing. After that, have trust in the turnkey provider's PM. I put that third because you can always find another PM, but you can't change 1 and 2.
Also, normally risk dictates the rate of return. If you're seeing RTV's over 1.2%, then there's a risk in the tenant type. If the RTV is around .8% and below, you're either speculating on appreciation or being totally passive on the investment (the high cost of a super PM).
This is going to be harsh, but stop over analyzing and focusing too much on the negative experiences of others to validate your fears. Stuff happens even with the best turnkey providers. It'll seem chaotic up until you get that first rent check. All concerns then just miraculously disappears.
Illicit and trust specific feedback from other BP members and be confident in your strategy. Grow your turnkey portfolio quickly to minimize your exposure on one single property. Good luck!
Originally posted by @TJ P.:
I'll put in my 2¢ regarding customer service. I travel often for my W-2 job and if it leads to an area requiring more investigation on my part regarding TK, I try to visit the operation and view some properties.
I've had one hell of a time lining up visits for a recent trip to MO. I had considered putting out a blast but found someone on short notice that squelched my anger a bit. PM for details.
For those TK providers, please look at your approach to customer service at every level.
Disclosure: I provide turnkey service
Hi TJ P:
I think you are going down the right path in regards to defining a strategy outside of your immediate marketplace, the next step is not only defining the marketplace but also considering the group you are electing to work with. I always recommend to refer to a simple guide about turnkey to drill down the secondary and tertiary factors you may want to weigh, ahead of defining the final destination. It is not only about the asset, it is the entire experience and expertise of your trusted on the ground team, I appreciate your post!
Finally, I have to plug Cleveland, Ohio - take a look -
Happy investing!
I would love to keep this going and revisit!
Anyone heard of REI Trader LLC located in Birmingham, AL?
@Lane Kawaoka oh that’s great! And how do you like their PM? Also, is their price negotiable? I’ve never worked with Turnkey before and interested in trying it out.
@Mora Clark I don't if its moral to discuss price especially since there are way more TK buyers these days.