How do you price a turnkey property for sale?

[Account Closed]

I have a property in Katy Texas that I acquired through long term seller financing. I have a few exit strategies in mind, but thinking about selling it as a turnkey rental.

Does anyone have suggestions on how to properly price a turnkey property vs a standard resell?

[Keith Anderson]

I'm a turnkey buyer, not a seller. Not saying I approve of these tactics, but it seems like most sellers price based on an investor's expected monthly cash flows, cash on cash returns, cap rate, or a combination thereof.

Most sellers I've vetted use 5% allowances for vacancy & maintenance, which most investors consider too low. (But since this practice is pervasive I am assuming there are buyers that bite anyway.)

It sounds like you plan to sell the property fully tenanted and post-rehab, correct? If not, you may need to do more handholding and limit your buyer pool.

Check out the pro formas from some of the big turnkey marketers for a sense of how they position properties.