Real estate is an incredibly powerful tool.  

It can build wealth, increase your net worth, give yourself and your family financial freedom. As Andrew Carnegie was famously quoted, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” Although this quote is now many decades old, the power and truth in it is very much alive and real today.

Knowing that real estate is a great investment is one thing. Having the understanding how to buy, renovate, lease, and manage a property is a totally different problem to solve.

A well-renovated and managed turnkey house through a great turnkey provider solves this problem.

Every turnkey provider handles their process a bit differently. So, for the purpose of this article, I’ll use Bridge as the example, since I’m so familiar with our process.

What happens at Bridge is we first go and buy the house. We find our houses from a variety of sources like the MLS, or off-market from sellers who need to sell because of a divorce, a death in the family, or they just can’t fix repairs that need to be taken care of.

Next, we create a full scope of renovation work for that property and review everything that needs to be repaired. Maybe it needs a new kitchen, appliances, new or re-finished flooring. It all depends on the condition of the home when we purchase it. At Bridge Turnkey Investments, we’ve built a high standard to decide what needs to be worked on. If any item in the home doesn’t have at least a 10-year useful life or more, we fix it or replace it. That includes the roof, windows, plumbing, electrical, appliances, HVAC. Everything.

After the renovation is completed, the property is inspected, and all items are addressed from that inspection list and repaired. Again, Bridge employs a three-step inspection process, including a third-party inspector and our property manager’s inspection. Not all providers do this, it’s simply our standard. The property is cleaned and a professional photographer takes pictures of the turnkey property.

From here, the property is listed for rent by a professional property manager. Interested potential tenants view the property, apply to rent the home, go through a vetting process, and ultimately sign a lease and move into that property.

Now is the fun part. The investor gets to review the potential property looking at the sales price, the rent rates, taxes and insurance, and decide if that property is a good fit for their portfolio. Once an investor selects the property they would like to purchase, a contract is made between the turnkey company and the investor, and the property goes under contract to purchase. The buyer and seller sign that contract, and earnest money is sent to the title company or attorney, which completes the beginning of that sales process.

The investor will review the inspection for that property. If they are getting financing, an appraisal is also ordered.  The lender from the bank will also be working with the underwriter on the details of the mortgage and getting everything on the lending side to the finish line.

When the investor closes on their turnkey property, they now receive the rental income from the management company, minus any repairs and management fee needed each month.  

 

The incredible power of the turnkey property is the ability to own real estate that you haven’t had to renovate or manage, and still get all the benefits.

Some of those benefits include the pay down of your mortgage from the tenant paying rent, tax benefits from depreciation and interest paid on the property, and the potential cash flow on a monthly basis that brings passive income.  Real estate is truly awesome!

Although no investment is 100% risk free, the turnkey process allows investors to invest in real estate from wherever they are and own the property without having to find, renovate, or manage that property.

It’s really important to understand and vet the turnkey provider in how they do their renovations. What items do they replace, how do they manage the tenants and how do they share information with their owners? What is their culture and philosophy? Investors should make sure it’s a great fit both ways for themselves and the turnkey provider.

Once you have found the right provider, and the right property, it’s go time! Have your down payment or 1031 funds ready to go, go under contract, close, and CASH FLOW. Then, repeat. Turnkey properties are an awesome way to get into real estate and truly transform not only your income, but your wealth and your financial future, without the hassle of the buying, renovating, and management of the property.