Ever play that game 20 Questions? Tons of fun, right? Maybe, depending on the circumstances and who you’re playing with. As a real estate investor, this can definitely be an interesting game to play – maybe not always fun, but certainly revealing about the person/company you’re dealing with.
It’s definitely a game you need to be playing with any turnkey company you’re considering working with, too. Choosing a turnkey provider with no prior knowledge of who they are and how they run their business is a recipe for disaster, and the best way to learn more is to simply ask. Here are 20 questions you need to ask anyone in the turnkey industry you’re considering working with:
- Who are you?
- How long have you been selling turnkey properties?
- How many properties are in your inventory?
- How familiar are you with this particular market?
- How do you choose your properties?
- What is the process from when the property is purchased by the turnkey company to when it sold to an investor?
- Can you provide numerical data showing a property’s profit potential?
- What sort of rehab work do you perform on your properties (and who does it, and what quality of materials are used)?
- Do you offer any type of warranties on work that was done to the property?
- Do you offer any sort of financing? Do you work with other lenders?
- Are your properties already tenanted?
- What does your tenant screening process entail?
- What does the average tenant look like at one of your properties?
- Do you offer a rent guarantee?
- Do you offer property management services (and are they in-house or through a third-party, and are they licensed)?
- If so, what do these services include and how much are they?
- How do you handle communication with your investors?
- Can you give me references?
- What can I expect after I buy the property?
- How do I get my cashflow?
Seriously, you need answers to ALL these questions (and any others you can think of) before you decide to move forward with a particular turnkey company. If they can’t answer them or they provide unsatisfactory answers, you need to find another provider. Any company that’s worth your time and money should be willing and able to answer these and more.
While you’re talking with them, be sure and listen to your intuition, too. If there are any red flags or a little voice telling you that maybe this isn’t the one, don’t ignore it. Remember, you’re going to be working with these folks for a while – possibly as long as you own the property – and it’s important that you can trust them and feel comfortable communicating with them. Also, pay close attention to what others are saying about them. Follow up with those references they provide, and take the time to search online for reviews as well. This step may very well give you the most accurate information that’s out there about the provider.