Memphis turnkey properties?

Question

Hey guys,  I'm new to bigger pockets and REI. I'm considering out of state long term rentals in Memphis.

Does anyone have any opinions on turnkey management vs buying and using my own PM and handyman?

TK has some benefits but it looks quite costly

David Hutson · Answer

@Chris Sanchez, @Caleb Heimsoth,

I believe about 11 are turnkey and several of those were not bought directly from the turnkey company who manages them.  I have also bought off MLS and from a wholesaler.

If a company is turnkey they should own and manage the PM company that manages your house.  I wouldn't buy from a turnkey company unless they did.  I want to ensure they will cover any repairs that may occur within the first 90 to 180 days that should have been caught.  I also want to ensure the tenant they place is going to be a good tenant and not someone they throw in and let some other company deal with.

As far as recommendations, it's going to depend on what you are looking for and the area you want to be in.  Do you want a $70k house or a $110k house, what class of home, what areas, what return are you looking for, etc.  There are many posts that will cover them also.

I go out there twice a year for five days and meet with the leadership of the companies I like and some others that I think may interest me.  I also meet with PMs or agents I may want to work with in the future.   I definitely think that should be a requirement the first time or two you are purchasing out there but I will say I have only been in three or four of my homes there but I do get them inspected.

Some of the companies that I would recommend are Memphis Invest, Memphis Turnkey, Rent to Reward, Mid South Homebuyers and Memphis Buy and Hold but they are all good for different reasons and work different parts of Memphis.   If you want to PM or email me I'd be happy to discuss it with you if you.  There are others and there are some I stay away from.  It's all based off your goals.

David

Douglas Skipworth · Answer

Hi, @John Voychick.

Both models can be great!

To me, it comes down to how hands on you want to be.

In the turnkey model, you pay more money.  In the "do-it-yourself" model, you spend more time.  Either way it costs.  It just depends on if you'd rather spend time or money.

Again, neither method is better or worse.  In fact, both are great ways to invest in real estate.  You just have to determine which one is better for your specific situation.

Best wishes to you on your journey to real estate investing success!

Spencer Glaser · Answer

@Chris Sanchez @John Voychick

I recommend you reach out to @James Wachob and @Mark Hart with Memphis Investment Properties (http://memphisinvestmentproperties.net/). They are a full service turnkey operator and have a property management arm with over 1700 units under management.

Curt Davis · Answer

@Chris Sanchez

You should check into memphis turnkey which is owned by @alex craig. Solid company and their property management is very good. They manage my portfolio of 26 Homes.

Curt Davis · Answer

@David Hutson

I dont think in order to be considered a " turnkey " company you have to own the management company. That as you know is the one thing that makes us different then many other companies which does have its benefits. We provide the same type of service and still have our hand involved with the management.

Chris Sanchez · Answer

Great questions @John Voychick . I’m considering Memphis also.

@Caleb Heimsoth and @David Hutson :

Thank you for sharing your expertise. Which turnkey companies would you recommend in Memphis? I’m looking for one that owns and operates its management company.

Tom Ott · Answer

Well, I do not know much about Memphis aside from the fact that is it crawling with investors right now. Have you thought about other markets that are less inflated by out of state investors?

Turnkey is great for investors who are from places like CA, NY, or other huge markets. If you work a 9-5 it is the way to go unless you are ready to become a full-time Landlord or flipper. It can really take a ton of time.

You should try looking at:

The Best Types of Markets for Profitable Turnkey Properties

and

What to Ask When Working With a Turnkey Provider

David Hutson · Answer

I'm with @Caleb Heimsoth.  I own 15 properties in Memphis and I have a mix of turnkey and buy then rehab.  Turnkey is great because it's done and cash flowing from day one.  Buying and rehab'ing has been ok but depends on how good of a deal you can get on the home and then hoping for not too many issues that you didn't know about pop up.  The biggest issue with this option, in my opinion, is that you can get a quality rehab done for a decent price.  By the time you pay the contractor or someone else an extra 15% to manage the rehab the overall cost hasn't been hasn't been that much less than turnkey and turnkey homes have, in general, been better quality rehabs.

James Wise · Answer

You can invest in Rental Real Estate in two very different ways.

Option 1

You pay a company to do everything for you.

Option 2

You build up your own infrastructure & handle it yourself. Option 2 has the opportunity to be more profitable than option one but does require you to be an active member of the business. If you are trying to do this, especially out of state with no roots in the town you are investing in it can be a risky proposition. IMO you are probably better served using option 1 for out of state rentals. Utilizing option 2 is a better option for properties closer to home, in areas where you have intense knowledge in contacts or for those with many years of experience in the real estate investing space.

Russell Roberts · Answer

Personally, if I was investing long distance, the ONLY way I would do so is via turnkey provider.     In Memphis, I visited Mid South Home Buyers, Memphis Turnkey and Memphis Investment Properties this year.     All three businesses made overall good impression with me.  MSHB has a long investor waiting list, which that alone is probably a good sign.  I spent the most time getting to know Memphis Investment Properties and they have good inventory available, so I ended up purchasing 2 from them this month.  It will take some time for me to give an experienced review, but I'm optimistic about the investment along with the people behind their business.

Memphis turnkey properties?

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