"Turnkey companies" refer to businesses that are fully established and ready to operate immediately after purchase. It means that all the necessary elements and processes are in place, such as equipment, infrastructure, systems, and employees. Essentially, it's like buying a ready-made business package, allowing the new owner to start running the business without much hassle or setup time.
Full definition
We host other
turnkey companies in our offices to show how our company was built and the level that they have to perform if they want to be considered a great company.
My recommendation is to fly out to a couple of these areas, tour the neighborhoods and meet
with turnkey companies and or real estate brokerages.
I just left a comment on a blog talking about how I believe out - of - state investing is actually the easiest route for a beginner investor if you go
through turnkey companies (which is all I go through) because it takes so much of the risk out of the equation.
I recall at some point in the past asking about their proforma sheet and they are trying to present an apples to apples comparison with
other turnkey companies.
A lot
of turnkey companies don't have the capacity to keep holding properties as buying, renovating, and holding properties can be capital - intensive and some of these companies manage and sell hundreds of properties.
I received an email this AM from an investor in Northern Cal who just attended a meeting with a provider where
multiple Turnkey companies from all over the country made their pitches and then went straight into contract meetings.
When you move into some of the more affordable markets for turnkey properties, you will find these are primarily SFR, and that is what
most turnkey companies focus on.
However, those new to the industry might want to consider a Memphis
area turnkey company to minimize fuss and hassle instead.
I've seen a
few Turnkey companies (Memphis, TN, Birmingham, AL & Atlanta, GA) which seem compelling based on my situation but from what I have seen there isn't money to be made at the buy given the markup the providers make.
I personally don't
like turnkey companies, so i created my own team in a great market to buy, fix, and manage rentals.
Repeat clients and growth through word of mouth fro satisfied clients are the holy grail for any service business and that is exactly what a
good turnkey company is.
The turnkey company is a business and needs to make a profit so that is understandable.
Use
a turnkey company to quickly find new investment opportunities.
Then that qualified buyer is introduced to
a Turnkey company who in turn pays the provider $ 5,000, $ 6,000 or up to $ 10,000 per house sold.
the turnkey company and the property manager are the same.
In my opinion, they are in the business of selling qualified buyers to
Turnkey companies.
In fact you should probably start with local PM's checking rents before you even call
the Turnkey company.
The investor is the commodity and
the Turnkey company is the buyer.
I stumbled upon
an turnkey company, conversation as going well, all until I started exercising regular prudent business judgment and started to vet the turnkey owner and what he was saying and asking if I can verify his numbers and talk to his property manager, as well as asked for prior customer reviews of clients who liked him, and preferable one who he had a problem with and how it was resolved.
Are you looking for
a turnkey company?
@Soh Tanaka not
a turnkey company for the house, but a turnkey company gave me a lot of insight into the area.
As with
any turnkey company or anybody selling an investment property for that matter, i would only use the pro-formas as a reference, but should not substitute your own due diligence for each expense item.
Not trying to be snarky here or ruffle any turnkey people's feathers, I'm genuinely interested in learning what each party gains from an arrangement like this and specifically what's in it for
the turnkey company and why not just hold the property and keep all the profit?
Turnkey is just a marketing term and it is bastardized to the point where even the promoters are calling
themselves Turnkey companies even though they never buy, renovate or sell anything.
However I had some drinks with a buddy last night who has had success with a portfolio of SFH's in Indiana using
a turnkey company that he trusts and our conversation got me thinking.
I'm guessing
a turnkey company would not want to hold a ton of rentals deploying all their capital when they can get other peoples» money to scale their business and create multiple income streams such as PM (no matter how small it is) and fees.
@Steve King
the turnkey company usually does a good job at marketing and is able to sell to investors more than they could sell retail.
We're talking about $ 25k - $ 50 deals here so low barrier to entry, the sales commissions / management fees can't be that great for
the turnkey company and I'd expect a legit company to be capitalized such that they could buy and hold those properties themselves.
My buddy came to me with some properties in Chicago from
a turnkey company.
@Ciprian L. - Yeah, we were first looking at C - neighborhood SFRs with
a Turnkey company in Kansas City, it sounded amazing.
Doesn't always have to be
a turnkey company that finds houses, there are local resources that help with finding and managing without the turnkey higher cost.
With each turnkey provider being slightly different, it is reasonable that «turnkey» means something different to
each turnkey company selling homes.
Investors working with
a turnkey company benefit from the experience and expertise of a company with boots on the ground.
Realtors and
Turnkey Companies: Getting to know someone in the real estate industry that can help you catch wind of potentially valuable investments sooner rather than later is a really excellent idea.
Before going into business with
a turnkey company, take the time to tour a few of the other properties that they manage.