Turn Key vs Do it yourself

[Parius Futch]

We have a few properties now but of course, we want to grow.  What is the best way to build a portfolio? So far the properties we have bought have been safe but not necessarily turkey. 

What are the advantages of turnkey?

What are the drawbacks?

Who are the most trusted turnkey providers?

What should I be looking for?

any other advice you can provide would be appreciated

[Mike D'Arrigo]

@Parius Futch Turn key is a good way to go for an inexperienced, out of state investor that doesn't have the time, skills or desire to do it themselves. The advantage is reduced risk by working with experienced experts.  If you're going to go the turn key route, you need to vet your turn key company well.

In general, the ones to avoid are the ones that:

• Don't allow financing or a finance contingency (it can be a good indication they are selling above market value)
• Don't allow for your own independent property inspection
• Are not realistic with their pro forma's (i.e. they don't include vacancy or maintenance projections or use unrealistically low vacancy factors)
• Require you to pay for any renovation upfront
• Sell only in cheap. low end neighborhoods
• Don't accurately represent the neighborhood/property classification
• Don't have consistent rehab standards for all properties