All Forum Posts by: Jeff Schechter

@Richard Covarrubias We operate in the same market.  I don't know those guys, but I've heard good things.  They offer a rent guarantee, which is unusual.  Best thing to do is GO VISIT any of the companies that you're looking to do business with!

@Jay Hinrichs - Thank you for your kind words.  We simply did the best we could with a bad situation.  

@James Wise - Thank you for allowing us to tell our story....without all of the normal edits that most "journalists" do.  The final video left the facts intact... excellent job!

Hey @Brandon Zeng, we've not worked with them before.  We own a successful TK company in Indy, and have noticed some of the rent guarantees that are being done in the Turnkey space.  This is not something we will EVER do, as it is not something that can be controlled.  In other words, we can do a good acquisition, we can do a good rehab...so we can guarantee those things via inspection, warranty, etc.  However, even with good tenant screening processes, nobody can guarantee human behavior.  If that's being done, YOU are paying for it...in additional markup of the property.

@Sachin Amin Here in Indy, we do about 80% SFH, and 20% Duplex. The duplexes must be nice, and be in decent areas, otherwise they become too difficult to manage and don't perform as well as SFH's. We never do anything bigger than a duplex... again, the tenant base is just too difficult to manage. The lack of product that you're experiencing has much to do with the fact that most newbie investors just want multi's because the numbers look better on paper.

@Anthony Van Gilder  There's lots of good advice here.  Much of your decision on using a Turnkey company should be based on how active you want to be.  

Notwithstanding the glut of information about how to do a BRRRR long distance, that is very difficult to pull off without getting burned... it requires a great team, and plenty of your time and involvement. There is also a lot of risk.

Should you want to just get a great property that performs, and don't want the headache of acquiring, rehabbing, placing and managing tenants, etc, then TK is a great way to go.  Yes, you'll pay the TK's markup, but you'll also be shielded from all of the risks in doing it yourself.  A good TK has enough economies of scale to get you a solid property, at a price that makes sense.  Like the others stated... just do your due diligence, and you'll find something that fits.

Good luck!

Not all TK's are created equal.  They operate in different markets, in different property classes, and rehab to different standards.  In our business, we've found transparency to be the most important thing we can do.  As example, we order two inspections during our rehabs...one up front for our rehab crews, another at the end to make sure we didn't miss anything.  These, along with full rent analyses of the area, help our investors understand exactly what they're getting, and have a reasonable assessment/expectation of how that property should perform.  

Where investors get hurt:

1.  By being lazy and not doing enough due diligence.

2. By relying solely on ROI projections from a TK provider (see #1).

No matter what their benchmarks (which may vary by property class, area, etc), if a provider is not willing to provide hard evidence of the condition of the property, it will be difficult for an investor to make a smart decision.  

Disclaimer: I'm a partner in a TK company in Indianapolis. I know (either personally or by reputation) many of the good providers. Each one may be a little different in their approach but these are the ones that stand out with excellent reputations.

@Clayton Mobley - Spartan Invest

@Chris Clothier - Memphis Invest

@James Wise - Holton-Wise

Note, there are some other great "promoters" out there, but like us, these companies are actually "providers" and manage the processes from start to finish.

Disclaimer:  I'm a partner in a TK company in Indianapolis.  I know (either personally or by reputation) many of the good providers.  Each one may be a little different in their approach but these are the ones that stand out with excellent reputations.  

@Clayton Mobley - Spartan Invest 

@Chris Clothier - Memphis Invest

@James Wise - Holton-Wise

Note, there are some other great "promoters" out there, but like us, these companies are actually "providers" and manage the processes from start to finish.

@Kenneth Biason Again, I'd encourage you to shop around.  There is a vast difference in QUALITY of rehabs too.  Other considerations... are the rehabbers warehousing items that they go through a lot of, or is everything being purchased at Lowe's/Home Depot, and then getting a contractor markup on those items?  Do the rehabbers offer a warranty on their work?  Do they allow inspections afterwards, etc?  PROCESS is important to the quality (and cost) of the finished product...cutting corners should not happen on ANY project.  Anyone can ultimately "have a team."  The question is, how much value does that team bring you?

There are no blanket statements that make sense in this arena.  @Clayton Mobley's assessment of the value of time is accurate.  What most people who want to "build a team" fail to realize, is that they are not operating at scale.  They do one deal at a time.  They are still paying big markups for contractors, and possibly paying more for the property up front.  

Turnkey companies that operate at bigger volumes (10-20 deals per month) have MUCH better buying power, and MUCH more economies of scale built in when it comes to rehabs.  In order to get to this size, ALL of their operations have to be systemized.  In many cases, the end buyer is NOT paying more.  

It pays to shop around!