Turnkey providers- good/bad/ugly/confused

[Jackson Long]

Hey guys,

So I just learned about turnkey providers fairly recently and I am fascinated, impressed, and kind of turned off all at once.  I was hoping to get some conversation to help me think through this and maybe decide how I really feel.

Firstly, I am like- whoa that is badass I wanna do that!  

But then I am like- buuut if I am going to find, buy, rehab properties and control a streamlined property management operation...  Why wouldn't I want to own the houses too?

At the same time I keep thinking...  I buy moderately distressed properties and fix them up to be rentals...  I generally don't buy flipped properties because there is a big chunk of value there that I am giving to the flipper.  I want him to be successful- I just don't want to pay for it.  *I* want that success.  I feel that way about property management too, but I know I need to scale out of this (look for posts on THAT subject later).  I also feel like I create value by identifying great properties...  All of those things I am paying the turnkey person to do- so giving away money.

Help me with some more thoughts and/or context so I can properly frame my thoughts please!

Thank you,

J (turnkey folks are welcome to post here too- I want to understand so I can decide)

[Jay Hinrichs]

@Jackson Long  this question of why don't the TK providers just keep them all is asked quite frequently.. but I think I can answer

1. some of these guys do 20 to 50 houses a month.. not possible to get them all financed long term.. its all short term debt.. ( ask me how I know) lol.

2. Like myself I build homes in Portland and Charleston SC.. we don't keep any of them we sell them to new home buyers who are looking for great new homes.. we are in the business of selling homes not keeping them.

3. Many to Most TK providers do keep some of the homes for themselves on a systematic buying routine.. ( ask me how I know ) LOL...  but again its not possible for most they are relying on the profit made on the flip of the home to run their business and feed their family.

I have helped many quasi TK to Investors build some substantial portfolios a few in the deep south are coming up on 250 homes in the last 3 years.. But they are not the average turn key guys.. most sell and keep a few. these guys keep most and sell a few.

hope that helps... and your right there are many marketing companies that do not own the assets they are just acting as real estate brokers and there is nothing wrong with that.. a few of them get razed on BP because they don't really come out with it... LOL..

see Brie's sight turnkey reviews.. it list many ACTUAL turn key companies and a few marketers no squeeze page and you can look at REAL inventory etc...

Good luck with it... and I hope this sheds some light on it.