@Todd Fry,
Thank you for posting this, hopefully people will read about your experience before moving ahead. I think turn-key companies all have the same flaw- none of them are truly turn-key. Many of them even openly state that they're selling you a house over market value to account for the work they're doing(or will do- I don't really remember how they justify it, but there can be no justification for paying more for an asset than it's worth.) If selling something for more than it's worth is part of their business model- and it seems like you overpaid here- that's a doomed business model. It's like trying to sell $20 bills for $25. You might find some people willing to do that if you promise them something nice later on- but eventually, the Ponzi-like nature of such a scheme will become self-evident to all.
Many in this thread have advocated selling the house and moving on. I don't know Indianapolis well enough to agree or disagree definitively, but if you can possibly hang on and make your investment cash flow positively, I would suggest doing so, even if you could make the equity work slightly harder somewhere else. What you're getting now is an education- even if it's a slightly painful one. If you handle this properly, this project can become a springboard for future investments.
It sounds like you're on your way towards getting competent management. That's definitely the first step. After that, run the property awhile- you'll quickly find out if your new manager is worth his/her salt. A great manager can turn a dog around- a lousy manager can turn a winner into a dog. If your manager can make this property work, then you know you're working with a great(or at least 'good') manager. Leverage that- work with your new team member to find your next property. A good manager will be able to tell you which properties are good or bad deals- after all, he or she will be managing it in the future, so it behooves management to choose well.
And since this is your first property, I'm going to make an extraordinary recommendation. Give the tenants your email address(not your real one- kind of a junk one that you may check daily. I use my old yahoo email for this purpose- it doesn't pop up on my phone, so it doesn't distract me.) If the residents have problems reaching your manager, your tenants will let you know- loudly and quickly. After management moves from the 'trial' period to the 'trusted' period, you can stop doing that with new tenants.
Good luck- turn those lemons into lemonade.
Michael
(PS- I think you should've left the videos up. You folded on that negotiation too easily. Maybe it should've been more like- "OK, Morris, I won't pull the vids, but I'll publish a retraction and publicly state how you've made it right once you've done so." I understand your self-interest - but when someone sells something that isn't promised, let the sun shine brightly on the whole transaction.)
