The 10 Most Common Signs of Dangerous TurnKey Rental Operators
Real estate investing is really not hard to get right – IF you use the protective measures available to you like property inspections, appraisals and rent verifications. When it comes to working with a turnkey property company, here are just a few of the things we look for at the outset when vetting teams.
1. Inexperienced operators If they don’ t have a solid track record, they will be practicing and learning with YOUR money.
2. Not Walking the Talk If they don’ t own a portfolio of rental property, they won’ t really know firsthand what it takes to succeed.
3. Lone rangers If they don’ t have a team to support them, you won’ t be supported either – especially if anything happens to them.
4. Lacking systems If they aren’ t organized with the right software and systems, they will get overwhelmed and be unable to serve you over the long term.
5. They operate in the‘ hood C properties can look real good on paper, but reality is a different story. Stay away from properties under $ 50,000 because they tend to be highcrime, highvandalism areas.
6. Shoddy renovations If they are not fully renovating the property, they are just making a profit and leaving you with repairs. Demand that all plumbing, roofing, HVAC, boilers, foundations and electrical be upgraded to code— and get inspections to verify.
7. Rental or vacancy guarantees There are no guarantees in real estate and a rental guarantee won’ t be necessary if you buy right. Most operators who make guarantees have padded the price of the property at the outset. Make sure you really understand market rents.
8. Overmarket pricing Many turnkey operators sell their properties above market value. Outofstate investors from highpriced markets are targets because they don’ t understand local values and think everything is a deal because it’ s so much cheaper.
9. Inexperienced property management Many turnkey operators choose to do their own property management. If they do not have at least 2 years’ experience with lower than average vacancy rates – don’ t use them or you will be part of their learning curve!
10. A history of fraud It is astounding how many scam artists are attracted to the real estate business. It’ s worse than used car salesmen! This is an easy fix— get background checks.
We’ ve already done this work. Use our research.
At Real Wealth, we have vetted dozens of socalled“ turnkey” operators and are
happy to share our research with our members. Basic membership is free. You can join at www. RealWealth. com Once you are a member, you can meet with one of our investment counselors to get their feedback on property you are considering buying. We have the information you need to make the right decision.
We are also happy to provide you with a list of truly turnkey companies who have rave reviews from our 16,000 members. These companies find properties at wholesale prices in good neighborhoods near jobs. They then renovate the properties to likenew condition. They screen tenants to very strict standards and offer ongoing, excellent property management in place.
MEET KATHY FETTKE
Kathy Fettke is the CEO and CoFounder of Real Wealth and author of Amazon bestseller Retire Rich with Rentals. She specializes in helping people build multimillion dollar real estate portfolios through creative finance and planning. Kathy is also host of The Real Wealth Show and is a frequent guest on FOX Business News, CNN, CNBC and CBS MarketWatch.
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