Any Turnkey recommendations?

Question

Hiim super new just have one investment property that used to be my residence. is turnkey still a thing? Any meat left on bone? Im in phx area so right now there isnt anything reasonable to buy for rental.

Looking to find a reputable turnkey provider or any advice/help

Ruchit Patel · Answer

Yes, turnkey works well for investors who want to be completely hands-off. Of course, not every provider is high quality, but there are a few. Rent To Retirement, REI Nation, and some are very famous and reputed. DM me if you want to know the details of my experience with them.

Steve Donovan · Answer

Greetings Account Closed!  These forums provide a wealth of information and sources of ongoing support.  Many new investors look to turnkey to get started, as it provides an entry point that requires less hands-on and allows an investor to participate in markets that offer higher returns.  If you go this route, it is important to realize that there is no common definition of turnkey.  In terms of rehabbing the property, the workflow can range from throwing a coat of paint on a wall or two, to an entire gut of the mechanicals, windows, siding, and flooring. Some providers take the approach that a furnace or water heater with several years of expected life shouldn't be replaced in the rehab, but that the final product should be priced accordingly. That furnace will need to be replaced in the next few years, but just not yet... Some turnkey companies sell the property to investors at the point where the rehab work is identified and quoted, but not yet completed.  The investor then waits for completion and tenant selection prior to earning any income.  Other providers sell the units only after the rehab is completed and the tenant in place.

Any turnkey investor should ask very probing questions of the turnkey provider regarding the condition of all mechanicals, roof and windows prior to entering a deal. As you will soon find, there is no common definition of a turnkey property, and it can be very risky (and expensive) to make any assumptions.

The ongoing management of the property is another area of vastly different approaches to turnkey investments. Some providers simply sell the property, and the investor is left to find a management company, maintenance personnel, snow and lawn care providers, etc. Other providers offer up recommendations for these services, and still other turnkey companies offer these services as part of their overall package. The range of offerings is great, and no assumptions should be made; you need to ask very specific questions regarding who is to do what.

All the best to on your investment journey!

Mackaylee Beach · Answer

Account Closed  There's many different ideas of turn-key.  I would recommend this method for any person seeking a somewhat hands off experience.  The turnkey provider will purchase, rehab and manage the property for you.  Ideally there are no major repairs needed on the property.  The reason I say "somewhat hands off" is because you should still keep in check with your property while it's being managed.

Drew Sygit · Answer

Account Closed

While investing via Turnkey Rentals sounds easy, you should understand that you will be paying full retail, often even more, for the properties.

Why? The Turnkey provider is looking to maximize their profits!

Also, there are numerous challenges dealing with Turnkey providers:

1) Terrible renovation work - we've taken over many properties that investor bought turnkey and they were shocked to learn the true condition of their property from our TakeOver video.
---So, get a GREAT property inspector NOT recommended by the turnkey company to avoid bias.

2) Misrepresenting Property Class - have seen many turnkey providers in Metro Detroit area sell OOS investors Class C properties as Class B. 
---So, learn the neighborhoods where you plan to invest and use Google Streetview to virtually explore them.

3) Poor Tenant Screening - they typically can't sell a property until they place a tenant. So, they have a conflict of interest in waiting for the right tenant.
---So, insist on them providing the rental application and supporting docs for your review. This means YOU need to learn how to evaluate a rental application!

4) Poor Property Management - Where do you think a turnkey provider will put their best staff, on selling properties and making $5k+/transaction or on property management and making $80/month transactions?
---So, ask about their standard operating procedures and make sure your management contract has an easy termination clause.

What are your options if you experience one of the above? Everyone thinks they can sue to solve the problem.

Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

Unfortunately, the majority of investors that experience terrible service from turnkey companies, figure out that it's not worth spending tens of thousands of dollars suing their turnkey provider and just move on - which allows the turnkey provider to not change their ways and stay in business:(

You should also check out this BP thread about the topic:

https://www.biggerpockets.com/forums/88/topics/976647-turnkey-company-suggestion?highlight_post=5648876&page=1#p5648876

Sam McCormack · Answer

Account Closed

I got a couple in my pipeline right now and Cincinnati. Would love to connect to show you them!

Chris Kendrick · Answer

you cant make money on a turn key, its not a thing,

Jordyn Scholer · Answer

Hi, yes it is still a thing. Are you looking only in the Phoenix area or other places as well?

Mayank S. · Answer

I can vouch for @fshouses in Indy. They are hands down the best TK provider operating out of the Indy Market. I am not sure if they still selling TK as the market has changed so much over the years. I purchased with them a few years back and they are managing my properties. I am extremely happy with their product and PM company operations.

Caitlyn Hummer · Answer

A great turnkey provider will you provide you with honesty, transparency, and a quality cash-flowing asset. This will not only build trust but a solid working relationship. It's also important to find a provider who has similar intentions as you, understand the market(s), and want to see you succeed. Lastly, someone who will want to build a great relationship with you and make sure you know that your concerns, questions, and goals are heard and important.

Pam Brown · Answer

Great Post!  I've tried to explain to clients that there is no true definition of Turnkey!

Any Turnkey recommendations?

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