Questions to ask Turnkey Providers

[Kyle Scholnick]

When doing your due diligence, what are the top questions you would ask a turnkey provider?

When was the roof replaced? When was HVAC replaced? What type of neighborhoods do you invest in and why? etc...

What are the most important questions to ask?

[Chris Clothier]

 @Kyle Scholnick

Key questions to ask a Turnkey company.  Pay close attention to the answers they give you and take notes.  If they do not want to give you the time to answer your questions, then you do not want to do business with them.  If they are irritated by the questions, definitely move on.

These are the KPI's that any quality turnkey company will measure and track and should be able to give you an accurate and correct answer at any given time.  If you pay close attention to the answers, you can do simple math to determine if they were just giving you answers you want to hear to sound smart or if they actually know how their company is performing for clients.

•Are You an Investor?  Do you own in the exact neighborhoods you are selling?

•How many investors do you work with?

•Do you own all facets of the operation?

•Do you offer rental or maintenance guarantees?

- IF they answer yes, ask them why?  And then ask them if they will put the guarantee on year three.  Guarantee are used as a sales technique and should be a red flag for an investor.

•Do you defer maintenance?

•How many properties do you manage?

•Do you own the properties you sell?

•How long have you been in the business?

•What is your average vacancy rate?

•What percentage of expiring leases will renew their lease each month?

•What is the average number of days a property is vacant between tenants - Move out to move in?

•What percentage of billed rent do you collect each month?

•What is the cost of an average repair bill after move-out?

•What are your management fees?

•What percentage of collected rent goes to yearly maintenance on average?

•What is your average # of months occupancy per property?

Three most important questions you can ask to learn a little about their mindset as business owners and how they are going to treat your investments:

•What programs do you have in place to keep tenants happy?

•What customer service programs do you have in place?  Will you call me every month with an update on my portfolio?  How many team members are dedicated solely to providing service to your clients?

•What has been your biggest mistake as an investor?  How do you protect your clients from making the same mistakes?