Have you ever considered working with a turnkey operator to acquire properties? Like in every business, there are some bad apples. If this is the route you choose to take, beware and do your homework.
This article points out some great checks, but overlooks one very important issue, will the property actually rent for the rate they project? How realistic are their rental projections? After all, this is one of the make-or-break numbers. Shouldn’t it be accurate?
We ran into such an issue with a Dallas-based operator. They didn’t have their own property management, because they sold these investment properties all over the state. Instead, they partnered with management companies local to the area of the property. We were one such unlucky company. After a trend of six properties being sold to investors with dramatically over-inflated rent rates and then referred to us turned into nightmares, we pulled the plug on the partnership.
We had to go through the same routine with each owner they sent. “Why won’t my house rent?” We always had to respond telling them that their rent rates were $200+ less than what they’d been promised. That made them mad and thought we were the ones trying to cheat them. We’d always have to pull the numbers and explain to them how to read our comparables reports in order for them to understand that we were the ones being honest. This always made them even more angry knowing that they’d been taken for a ride.
The lesson here is to check with a professional, check with someone who isn’t invested in the sales commission for a purchase you’re considering. It should be someone who will be honest with you. It should be a company with decades of experience in this market.
If you’re considering such a purchase in the San Antonio area, feel free to reach out. We happily run numbers for investors, whether they’re purchasing the property through us or not.