What have been YOUR issues/ problems with turney

Question

Looking for first hand info from investors that have bought from "turnkey" property management companies.

Please let me know the issues you be had, the time you've owened, the company,  and a rough estimate of how much money invested in repairs, etc

Thanks for your help in advance

Jay Hinrichs · Answer

there is no magic to this.

turnkey homes are rental homes.. turn key investors run into all the same issues any other landlord runs into.. Tenants  ....  repairs ... cap ex   .. etc..

Key is to buy a home in top end neighborhood not get sucked into low end inner city Ghetto type environments... this gives you the worse tenant base in the country basically and your issues will be magnified..

buy in an area were your rents are in the TOP 20% or so of the average rent and your creaming the top 20% of renter pool...

if buy were the rents are in the BOTTOM 20% of price point your dealing with the least stable.. the tenant is what makes and breaks you.

BAd PM of course and there are crooks in the PM business as well as some very good operators.. just need to make sure you vette them well.   start off by making sure they are licensed. MOST all states require real state license to manage property..

Bill Florence · Answer

I have walked away from a few but got close. Most notable issues were the neighborhoods and the poor rehab quality.  A lot of gotchas so do a lot of due diligence on everyone involved in the flip and property management.

Ali Boone · Answer

I started buying turnkeys in 2011 and I still own all of the ones I bought. Without looking up exact numbers of income vs expenses on all of them over the years, I can tell you I'm very much in the positive with all of them.

They've all had repairs to some degree or another, but none of them to the extent that my non-turnkey property has gone through. The only large repair I had to do on one of the turnkeys was due to me not being thorough with my property inspector and making sure he checked all the major appliances and I ended up having to replace a heating unit which cost a decent penny. That was on me and a lack of due diligence though. If you are thorough with your own due diligence before you buy, and are very in tune with the property inspection and ensure the turnkey seller fixes everything on there beforehand, you'll minimize repairs later. Anything major tenant-damage wise can be covered with insurance or storm damage or whatever. Otherwise it will just be normal wear and tear stuff and turnover repairs that you'd have to do with any rental property.

I'd say in my experience, 100% of the problems I've had with my turnkeys have been related to the PM side of things. PMs in general can be horrible, and PM-ing is not turnkeys' strong suit. But there are plenty of ways to mitigate that.

I've written a few articles to try to help out with lessening risk with turnkeys, some of them talking about the PM side.

https://www.biggerpockets.com/renewsblog/2016/05/2...

https://www.biggerpockets.com/renewsblog/3-importa...

https://www.biggerpockets.com/renewsblog/2016/04/1...

Hope those help to some degree!

As far as companies, I can tell you who I bought through but I don't recommend buying through any of them right now, for no other reason than markets are always changing and where the best opportunity is and/or with which company, is always changing. I'm happy to give you recommendations for markets or companies right now that I think are the best ones out there though. Message me anytime.

Chris T. · Answer

@Jared Smith

on top of the valuable advice Jay has mentioned, be wary of high projected returns provided by TK providers. Always do your own due diligence.

And if you do buy a TK property out of state, make sure you hire independent companies such as home inspector, mortgage broker or bank (NOT recommended by the TK provider), appraiser etc. So that you have unbiased opinions.

There are a lot of other investors who shared their TK experiences on BP. Start by searching for the name of the TK you're interested in working with, then the city etc.

Jared Smith · Answer

I work in the real estate field and have access to title, so I'm going off this and comps in the neighborhood

Jay Hinrichs · Answer

you need to compare apples to apples.. unless your looking at turn key inventory and then homes on the MLS  ( not Zillow or truila)  that is what you need to look at.

most turn key homes by reputable companies will be extensively rehabbed .. were MLS homes from a homeowner that has lived there 20 years may have 20 year old mechanicals roof etc..

Jared Smith · Answer

thank you Jay. From my own research I've noticed some of these property managers are trying to sell there home at a premium of almost 60% over market hoping to get an out of state buyer.  Its seems hard to find a property under market or at because they know.

Jared Smith · Answer

Thank you joel.   I've looked around but nobody gives there personal experience and issues that have arrived

Joel Owens · Answer

Jared top right there is search bigger pockets. If you put in turn key there is a ton of forum topics discussing various companies and actual investments and what their results have been so far.

What have been YOUR issues/ problems with turney

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