You’ll Find the Best Deals with a Turnkey Provider—Here’s Why

Working with a reputable turnkey property provider is often the best way to buy investment real estate outside of our local market.

Some think market research is one of the most important parts of real estate, but the truth is, investing in the best markets is only half the battle. The best deals are relative. You have to get the very best deal in today’s market conditions, and that takes foresight and knowledge.

Market Facts

New investors often believe one common myth: markets generally stay the same. The truth is, markets are changing all the time, and your success as an investor depends on your ability to see it.

Two specific market types are especially important to know. In hot markets (or a seller’s market), properties sell quickly, usually in two months or less. Inventory is low, so the market becomes extremely competitive. Because of this, investing is twice as difficult.

A buyer’s market is the exact opposite. It occurs when the number of properties available is high and the competition—and therefore, prices—are lower. This is the best time to invest.

Unfortunately, you can’t always wait to invest until the next buyer’s market shows up. If you find yourself looking at homes in a hot market, your life will be much easier with a turnkey provider.

Turnkey Providers vs. Independent Investing

If you choose to go it alone, be prepared to do all the work that a turnkey provider normally does to ensure you get equally good deals.

It’s not impossible to invest without a turnkey provider in a hot market. After all, most of the tools available to them are open to you as well. The bigger issue lies with the footwork involved. To be successful, you’d need to find off-market properties, which means you’d rely on a few key strategies:

  • Drive through neighborhoods looking for “For Sale” signs.
  • Contact property managers through direct mail—though this technique only has a 1% success rate on average.
  • Look for vacant properties.
  • Spend money and time setting up “we buy houses” advertisements, many of which must be put up on Fridays and taken down on Mondays, depending on local laws.

Turnkey providers do all that for you and more.

Because they know the market, sub-markets, demographics, etc., they have a better chance of finding the market’s sweet spot. Good turnkey providers know the tips and tricks—like where the new schools and shopping centers are going in. They’re better equipped to find properties at affordable prices that sill have potential to appreciate over time.

Those are all things you can do yourself, but it will take time and research and boots on the ground in states that may be hundreds or thousands of miles away from where you live. Turnkey providers have the experience to speed up the process and do it all with fewer mistakes.

When can I go without a turnkey provider?

Turnkey providers are usually unnecessary when you’re investing in a buyer’s market in your own city. Instead, you’ll want to find a good real estate agent who will provide and explain comparable sales. Remember, agents who specialize in investment properties are vastly superior to those who only know how to create general marketing strategies.

How Do I Know When I Have a Good Turnkey Provider?

As with everything, trust but verify. Start by looking at information on sites like Zillow. They won’t give you exact numbers, but if the rough estimates don’t match up with what your turnkey provider is telling you, there’s a chance something is up.

Another red flag is that your provider doesn’t want you to finance through loans. If they insist on cash deals only, they’re probably hiking the prices.

Even if you pay cash, don’t be afraid to get properties appraised, either. There isn’t always a rhyme and reason to them—sometimes one appraisal will be $20,000 higher than another for the same home—but they act as an extra resource when you verify your turnkey provider’s credibility.

In the end, most turnkey providers are trustworthy or they don’t remain in business for long. If you find the right one, they can save you a lot of money and effort. They’ll help you navigate the different climates of off-market investing, and ultimately, you’ll find better deals.