What to Look For in a Turnkey Provider
When you work with a turnkey provider, you should know that it’s a relationship that may last many years. Once you buy one property from a turnkey provider, it’s likely that you’ll want to expand your portfolio with more turnkey rental properties. For the sake of simplicity and expediency, most investors work with the same turnkey provider over and over again. Of course, that’s predicated on the assumption that they’ve chosen a good turnkey provider in the first place. If you’ve never worked with a turnkey provider before, you may not know what you should be looking for. Here’s some help in choosing a turnkey provider.
Years of Experience Being in Business
Always find out how long the turnkey provider has been in business before working with them. You may be able to find out from their website, or simply ask the representative. Years of experience matters for many reasons. For one thing, being a good turnkey provider isn’t just about selling properties. The turnkey provider needs to know how to analyze properties before they buy them. This helps to make sure that when they turn around and sell the properties to an investor, there’s sufficient cash flow or “meat on the bones” to make the property a worthwhile investment. For another thing, years of experiences means that the turnkey provider knows how to put those turnkey deals together as far as legalities go. Remember that when you buy from a turnkey provider, you won’t be working with a real estate agent. So you’re really relying on the turnkey provider to ensure all the inspections, tile work and paperwork is up to snuff.
Respectable Background of Owners
The owners of the turnkey provider should have a respectable background. What does this mean? It means you want to avoid working with turnkey provider companies where the owners have some shady dealings in the past. Look for things like multiple lawsuits, judgments or claims that signify that the turnkey provider hasn’t been following through on their promises to previous clients. Obviously you don’t want to work with turnkey providers who have any kind of criminal background. Finally, the owners of the turnkey provider shouldn’t have credit or financial problems. These could be a warning sign that the turnkey provider is desperate and might resort to questionable business practices in order to escape collection filings. You always want to work with ethical turnkey providers with a solid financial situation. Only then can you be sure that it’s a company that has the financial resources to do quality rehabs on their turnkey properties. You can look into the backgrounds of turnkey providers with a simple internet search. Most of those things are public information, but you do have to search for them. Consider it part of your due diligence before working with a turnkey provider.
Different turnkey providers invest in different markets according to what they deem to be the most valuable for themselves and their clients. Some turnkey providers invest in cities such as Memphis, while others invest in areas such as Buffalo or Detroit. At American Real Estate Investments, we invest in the DFW area, as we believe this area creates the best potential value for us and our clients. When choosing a turnkey provider, make sure you understand where they invest. If you have an interest in a particular city or state, you should choose a turnkey provider that offers turnkey rentals in that area. Of course, you should also consider areas that the most successful turnkey providers invest in. After all, they are the experts and they probably know some things you don’t about the turnkey market in that area. If you’re interested in a particular turnkey provider and wondering why they invest in a certain area, just ask. They should be able to provide you with hard data as to why they made those decisions.
In this day of online reputations, any turnkey provider that you’re considering should have several favorable testimonies that you can read online. They should either come from 3rd party sites or from the turnkey provider’s site. Naturally, more weight should be given to the testimonials on 3rd party sites. If you can’t find enough favorable testimonials and reviews online, that doesn’t necessarily mean the turnkey provider is no good. It’s often challenging for companies to get these testimonials; unless the turnkey provider actively requests service reviews, they may not have a large amount. In this case, just ask the turnkey provider for a handful of previous clients that you can email and ask for a reference. Any quality turnkey provider will be happy to provide you with that. If they won’t do that, or the references never come, keep shopping for a different turnkey provider.
This is what you should look for in a turnkey provider. When you find a good turnkey provider, you’ll be able to work with them over and over again without worrying about who you’re doing business with. Going through and vetting your turnkey provider ahead of time will ultimately save you time and money in the future. If you are interested in investing in the DFW area or working with us in any way, please feel free to contact us. We’d be happy to answer any of your questions, and we can supply many positive testimonials from previous clients. We look forward to hearing from you.