Author Topic: Turn-key investment real estate  (Read 2098 times)

Johnny Aloha

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Turn-key investment real estate
« on: April 12, 2013, 04:33:13 PM »
There are some related discussions (http://www.mrmoneymustache.com/forum/real-estate-and-landlording/how-do-you-find-good-investment-deals/), but I thought this might be worthy of its own thread.

Has anyone used a turn key investment company?

For out-of-state long term investors like myself, they seem to provide a good service.  They buy an undervalued house, renovate it, place a tenant, and sell it to you with enough money on the table for you to make money.  They could even manage it for you.  In most cases, the rules of thumb (50% rule, >1% rule, etc) can still be attained with good returns.

I've researched some companies that can provide 20%+ returns if you use financing. 

But I've also heard that some companies can be shady.  They might do crappy renovations, place a tenant into an above-market rent lease just to make the numbers look better, etc.  Just wanted to see if anyone has used this service.


KingCoin

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Re: Turn-key investment real estate
« Reply #1 on: April 14, 2013, 01:25:42 PM »
I recently started a thread on the subject:
http://www.mrmoneymustache.com/forum/real-estate-and-landlording/thoughts-on-turn-key-investment-companies/

There have been a few recent and contentious biggerpockets blog posts on the subject both pro and con.

Major takeaways?
1) You're going to pay a premium for the "full-service" nature of turn-key. It's up to you to back out what that premium is and whether the convenience makes it worth it. You're not going to get anything approaching a great deal. The best you can really hope for is an average deal that ends up being well managed.
2) You'll have to do your own neighborhood research. War-zone properties will have much higher theoretical returns, but it will be much more difficult to realize those returns.
3) Look for turn-key companies with good reputations and positive independent references.

Johnny Aloha

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Re: Turn-key investment real estate
« Reply #2 on: April 15, 2013, 01:10:40 PM »
Didn't see that, thanks!