turnkey

[Bob Collett]

Hi everyone

I see a few turnkey deals posted here every day or so. When Cleveland area turnkey properties are posted for sale, are they typically available for showing?  By definition, they are tenant occupied... So do most investors buy turnkey "sight unseen" based upon the numbers and credibility of the turnkey opportunity, or do they tend to get showings just as any other for sale listing?

I have a number of properties that I manage, and I am considering offering them for sale, but it is always a pain in the butt to show when tenant occupied.  Any insights or points of view on this would be appreciated... especially from turnkey providers, or those who have purchased turnkey properties.

[Ryan Mullin]

I'm glad you made this thread.  I actually started a thread like this a while back and it didn't get a single response.   What we have been trying lately is this...  (we are a brokerage in Indianapolis that provides turnkey props here and there).  

Get the property rented to tenants that want to move in in like 2 -4 weeks.  That 2 weeks to a month is when we try our hardest to get it sold, inspected, appraised etc.  Which is difficult to say the least. If we can get that done its the best case scenario.  

Worst case scenario is this:  Rent the property to excellent tenants, bother the tenants with an investor showing, then get it under contract to be sold...   then the buyer gets an inspection.  The inspector goes through the house nit-picking it.  The inspector talks with the tenant.  The tenant is informed of every single flaw with the house (at this point the tenants are questioning why the house was rented prior to the inspection, why all of these repairs need to be made, why is the house for sale when they just rented it, etc.).   

Now, we have to send our contractor in to get an estimate on repair items.  We get the bid, we agree with the investor buyer on what items will be repaired...  now we have a deal with the investor buyer.  Now the repairs get made.  Now we send out an appraisor.  Now the inspector comes back in to do the re-inspect.  At this point the tenants have been "put out" 4 or 5 times with people coming in and out of the house.  All this right at the start of the lease.  Tenants are not happy with this at all.   And...  at this point if the investor backs out...  and we have to re-sell it...   its virtually impossible to get the property sold, and keep the tenants happy.  

For our company we operate in the same few areas of Indy and the tenants talk.  We recently had to switch up our model to avoid ticking off tenants.  

There is no easy answer for this question.  Showing the property is just the start...