The idea behind “turn-key” real estate investing is that an investor can purchase a property from a company that will then manage that property for them. It’s basically portrayed as “hands-off” investing for busy professionals or investors that, for whatever reason, do not want to get their hands dirty managing their own rental properties.
But turn-key investing is no excuse for not knowing what you are doing. Here are some very important questions investors need to be aware of before seriously considering plunking money down with an investment company that will handle all of the details for you. Below are tips based on actual cases I’ve dealt with that involved turn-key investing.
1. Ask to see all documentation related to the property
The biggest mistake I’ve seen turn-key investors make is simply believing everything they are told without verifying any of the information that is provided. I’ve consulted with dozens of investors who bought into turn-key investments sight-unseen and ended up with major problems. I strongly recommend a detailed review of the property appraisal, and a title search to verify ownership.
*And here is a tip:
Check the addresses of the comparable properties in the appraisal to see whether they actually exist, and whether they …read more