Real Estate 005: Questions to ask your Turn-Key Provider

Below is a list of questions that I typically ask when interviewing a turn-key provider. A good/experienced turn-key will be able to answer all of these questions and feel comfortable sharing information with you, as they have a vested interested in your success. 

General Questions:

  1. How long have you been in business? 

  2. How many properties do you sell to investors a month? 

  3. Can you walk me through the purchasing process from beginning to end?

  4. How many investors (clients) do you have? How many are from out-of-state, or out-of-country?

  5. How many properties do your typical investors have on average?

  6. Do you have any references?

  7. Why did you choose this market?

  8. What price ranges are your properties?

  9. Do you offer any rent income guarantees (first or second year)?

  10. Do you own the homes? Are you a full Turnkey or a Marketer?

Market Specific Questions:

  1. Is the market tenant friendly or landlord friendly? What is the eviction process like? Have you had to evict any tenants?

  2. How are rent prices determined?

  3. What neighborhoods do you invest in and why (A/B/C, can you define them)?

Rehab Questions:

  1. What major cap-ex items (roof, hvac, furnace, plumbing, electrical, etc.) are repaired or replaced? How do you determine whether items are replaced or serviced only?

  2. Do you provide a full scope of work for each rehab? 

  3. What appliances come with purchase of the property?

Financing Questions:

  1. How do your lenders obtain financing? Who are your preferred lenders?

  2. How do you deal with properties that do not appraise for the purchase price?

  3. Do you require earnest money?

Closing Questions:

  1. If a third party inspection report uncovers additional repairs, how do you handle them (Will I get photos)?

  2. When are the timing of the additional repairs (before or after closing/are they included in an updated contract)

  3. Do you provide warranty on the rehab? 

Owner Communication Questions:

  1. How do I get paid?

  2. Do you utilize an owner online portal?

  3. How often is the communication on accounting/issues on maintenance/in general?

Tenant Related Questions:

  1. What does your tenant background check consist of? What are the requirements of a tenant?

  2. How long is the tenant lease agreements? What is the current turnover rate?

  3. Do you rent properties to Section 8 tenants?

  4. What is the typical "get rent ready" costs when a tenant leaves?

  5. If tenant destroys a property in excess of the security deposit, what is the procedure?

Property Management Questions:

  1. How many units/doors do you currently manage in this market?

  2. What is your current and historical vacancy rate?

  3. How long does it take to find a new tenant?

  4. Do you utilize a checklist when a new tenant is leased?

  5. What is the property management fee?

  6. When are rents due from the tenant? Do you charge a late fee?

  7. What are the fees involved (lease up fee, marketing fee, renewal fee)?

  8. What are the markup fees for maintenance costs (cost + markup % or cost + hourly rate)?

Remember not to make it a interrogation session, because no one wants to work with an "askhole". Put yourself in their shoes, working with hundreds of out of state/local investors. Please be respectful and remember that relationships a built over time. Make every effort to fly/drive to the market you are interested in and meet with the team who will be your "boots on the ground". Please make sure you do your due diligence and talk to your CPA/Attorney/Financial Advisor before making any investment decision. 

Good Luck!