use caution when purchasing investment propertiesThe term Direct Sale of a “TurnKey” Property is described as a property not on the market or listed for sale by the Real Estate Community.

Most of these type properties are owned by investors that bought in bulk.  They made minor repairs, threw a tenant in and called it “Turnkey”.  99% of the properties I have viewed with tenants are NOT in “TurnKey condition”. 

When I look at these properties for my clients, I require a meeting with the tenants as a condition of the sale.  Most of the tenants I spoke with were told if they move in NOW they will get a break on the rent if they want to do some of the repairs themselves, but never received a credit.

Some were told they would be paid for any repairs but never got a check. In other cases, the management company promised the tenant they will do the repairs but was never repaired.

The motivation for this type of sales is to flip the property to a buyer as “turnkey” because it was rented. The repairs then become the problem of the new owner.  The tenant moves out because they are upset due to the condition. Some haven’t paid rent at all or in months, leaving the new owner or new Property Management Company evicting the tenants. It does not take a genius to figure out that most of those “TurnKey” properties cost the Buyer a lot more money than if there were no tenant living in the property.

Remember that Realtors are licensed and held accountable to the code of ethics. Be sure you use a Realtor that is an expert with this type of purchase and a reputable Property Management Company you can trust.

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