Success or failure with turnkey properties

[Brandon Schlichter]

Every so often, i look at various companies that are selling turnkey properties. It interests me as an alternative to straight rental management, especially if someone could provide the turnkeys to purchasers AND offer management services, that way a up-front larger profit could be produced on the property sale to investor, then ongoing cash from management services.

However, one thing that strikes me as very odd is the way that turnkey real estate is priced. 

Some turnkey RE companies list 'income' on property as gross rents minus taxes and insurance, no other costs. Others include management, but not repairs & ongoing maintenance, others have no vacancy allowance. They start off at a 10%-12% stated rate of return, but once I add in all the other fees that a landlord should expect (R&M, Vacancy, Management, etc) they look less and less stellar, and more worrisome. Some of them provide next to no cashflow per month after debt service, or a measly $100 or so per month, and by that point I wonder if for the investor its even worth the effort.

So, for those that have bought turnkey properties (Mostly those who have bought several), how do you feel about the process in the end? Did you meet or exceed your expectations, and the estimated income from the property seller? Did they meet their stated rates as well?