Turnkey Out of State Investments— how does it all work?

[Steve K.]

Being in a competitive market, I've researched out of state investing a bit and have always been gun shy due to not feeling comfortable buying property that I don't personally control and having to work with a turnkey/management company remotely. However I had some drinks with a buddy last night who has had success with a portfolio of SFH's in Indiana using a turnkey company that he trusts and our conversation got me thinking. What I don't understand is this: if the deals are good, why don't the turnkey guys keep them for themselves? What's in it for them to give up these deals to out of state investors for a smaller percentage than they'd keep if they just held the properties themselves? We're talking about $25k-$50 deals here so low barrier to entry, the sales commissions/ management fees can't be that great for the turnkey company and I'd expect a legit company to be capitalized such that they could buy and hold those properties themselves. So why offer them up to random out of staters if the deal is good? Not trying to be snarky here or ruffle any turnkey people's feathers, I'm genuinely interested in learning what each party gains from an arrangement like this and specifically what's in it for the turnkey company and why not just hold the property and keep all the profit?