out of state turnkey or find your own

[Jared Smith]

Still trying to figure out if these turnkey companies are truly worth it.  One company claims to be turnkey then they give an estimate of how much work the home needs in repairs. 

 Yes, I understand they are doing the research and finding the property, property mgr, etc. But the fees they charge are crazy leaving zero room for equity down the road.  

Is there something I'm missing ? Or are they preying on investors that don't know what they are doing.  

Thanks for the responses

[Jeff Wallenius]

@Jared Smith there are some shady turnkey companies out there, that is a fact, but there are also some very solid companies that do a great job for their investors. You have to remember that as you said, the turnkey company is taking care of everything and the investor is owning property that will be paid down by a tenant, and the owner will also benefit from the tax benefits of property ownership. This is not an equity play, this is strictly a monthly cash flow and tax benefit play. You are buying a property that if done by a quality provider has a very solid rehab done, essentially a new home in most aspects. 

Some investors are being preyed upon, the investors that are buying in the D class neighborhoods are one of them. This is why I preach education and finding a solid team on the ground to work with for any investor looking into turnkey. Go with a proven, extensive track record operator!

If you want to be a truly passive investor that wants to own real estate and cash flow monthly, then yes you can be successful. If you want to be more active in your business, you can do better but it will take work.

Cheers!