Starting a turnkey provider

[Alex Silang]

Has anyone done this? Any advice?

I was thinking about doing it in a nearby city. BUT - I wouldn't feel "right" marking up my product so much that it wouldn't be passing appraisal (which happens a lot with memphis invest). IMO that's taking advantage of investors who are not in the area.

I have some contacts in my target city. They manage the properties for me. I could go on from there.

What do you think?

[Chris Clothier]

Originally posted by @Alex Silang:

Has anyone done this? Any advice?

I was thinking about doing it in a nearby city. BUT - I wouldn't feel "right" marking up my product so much that it wouldn't be passing appraisal (which happens a lot with memphis invest). IMO that's taking advantage of investors who are not in the area.

I have some contacts in my target city. They manage the properties for me. I could go on from there.

What do you think?

Alex,

I was alerted to your post when you mentioned Memphis Invest and had to laugh a little bit about the pricing comment about Memphis Invest. I want you to know that this is not going to an attack for the comment, but I push back fiercely when the integrity of our company is questioned. I looked and couldn't find you in our database, so that meant I really needed to respond if you had formed an opinion without speaking with us.

We do not price properties above market value. We price them appropriately for the value and service provided by our company and that opinion is shared a vast majority of the time by independent appraisers. Occasionally, properties are appraised below our sales price, but again, that is an appraisal opinion we do not share.

I will also say that there are two sides to the value equation. It is difficult to apply it to a piece of property, but not that difficult to apply it to a real estate service. Value is determined both by the price you pay for something AND the service you get in return. You will be hard pressed to find another company coming close to offering the same value in service. That is kind of why I wrote the rest of this post. To help you understand where real value comes from in the Turnkey niche and to invite you to visit us if you want to learn how to start your own company. There are no secrets with us. This is hard work and it takes dedication to being better than average.

Memphis Invest has been around for 15 years now and is managing close to $680 Million in asset value for passive real estate investors from all over the country. When I see comments about taking advantage of investors I think of another company out of New Jersey who may have ruined the lives of hundreds if not thousands of real estate investors over the last couple of years...not Memphis Invest. (As an interesting side note, the owner of that company owned a handful of passive investments out of state and had a knack for marketing.)

I think about the millions in net rental income sent out to investors from our management company in May or the fact that our average length of occupancy per unit is at 59 months. I look at our data showing that our rental price per unit is on average well-above our competition in most of the six markets we operate and I just wonder how someone can look at that as taking advantage.

I think of the over 600 leases that were set to expire in the first half of 2018 and how our company renewed those leases with the residents rather than let the property go vacant. Seeing as how our management company keeps the first month of a new lease and our average rent is over $1200, we "gave up" the opportunity to make $720,000 in revenue so that our owners could realize those dollars as rental income. That is called alignment of interest.

I saw that you are marketer. You listed that as a skill you really thought would help you start a Turnkey company. Unfortunately, marketing is not really the top skill to be great at locating good properties, buying them properly, renovating them to at or above retail standards eliminating deferred maintenance and then acquiring quality, long-term residents and managing them properly. No, marketing is important for sure, but white papers don't help with any of that.

You have to be committed to being better than everyone else in your industry every step of the way. You have to commit to the small things like pulling permits on every job even when no other companies do it. It seems like a waste of money, yet it is imperative if you want to separate. Otherwise you're likely to be average and I can guarantee you that the last thing anyone on BP or anywhere else needs is another average Turnkey company.

Memphis Invest is a a green apple in a box full of red. If you need help understanding the analogy, read Becoming a Category of One by New York Times best selling author, Joe Calloway. Then read his follow-up, Being the Best at What Matters Most where he featured Memphis Invest and Premier Property Management.

When you are done, if you really want to be an exceptional Turnkey company then you are more than welcome to visit us here in Memphis. There are no secrets. We will be happy to show you around and help you understand for yourself exactly how intricate a company like this is.

We have over 90 team members in six cities. We have spent in the high seven figures on technology and infrastructure. Our offices are tied together and our teams in the field implement mobile technology to keep data updated in real time. We are planning to roll out a custom built property management platform later this year for Premier Property clients. This investment in technology and people is really the backbone of our success.

Yes, we charge an absolute premium for our services, but we are not your average company. Our clients get 100% of what they expect from us in service, return and value. That has helped us elevate into our own category and that was entirely by design.

So again, if you ever want to see what that looks like in person so you can decide if you think you can offer a Turnkey service in your city, you are welcome to come and visit. We will be happy to help. We have had dozens of entrepreneurs from all sorts of customer service industries come visit our company to learn from us. A few real estate entrepreneurs have even been mentored by us as they started their Turnkey companies. There are no secrets with us.

Many of them are thriving today. No matter what, they all walked out with a sense of just how hard it is to be exceptional. Anyone can be average - that just never interested us all that much.