Our guest today is Gregg Cohen, a turnkey specialist and the co-founder of JWB Real Estate Capital. In this episode, we dig deep into turnkey investing and how this concept works. If you want to know if turnkey investing is the right choice for you, what are the costs, and how you can start your own, then this episode is for you! Learn more about Gregg and his journey at reiclarity.com!
“Our clients actually own the asset. So it’s not like they just invest with us.”
Gregg’s turnkey investing company is designed to make rental property investing easier. According to him, there is a big segment of the population who would like to invest in real estate, but they find it too hard, time-consuming or they live in an area where the market is not good for their goals.
Gregg’s company helps these individuals by owning and selling the house to the client with a tenant in place so they have positive cash flow from day one. His company does all the property management for that client as well.
“There is a really big difference between doing this business and doing this business well.”
Gregg’s advice on the key factors to start a successful turnkey company:
- Have property management in-house, otherwise, the sales team might pitch numbers that they cannot necessarily back up on the property management side.
- Sign more than 1-year leases because turnover costs are actually the biggest lever when it comes to your overall maintenance costs.
- Don’t forget that the clients should buy into a model and a team with you, so you should be more like an advisor than just a property manager. This way, you can both plan ahead for years to come.
According to Gregg, there are some scenarios when turnkey investing is not the right choice. For example:
- If you are somebody that likes to be very hands-on and want to have a part in a lot of the decisions.
- If you don’t want to trust in a company to operate in your best interest and you’d rather manage the process by yourself.
According to Gregg, if the turnkey rental property company operates in an efficient manner, they should be able to acquire properties at a discount to market value for you. However, there are costs to consider when you are thinking about working with a turnkey rental company:
- Property management fee: it consists of all the activities to be able to maintain that relationship with your residence. It’s usually around 8%-12% of the rents that are collected.
- Tenant placement fees: it is generally around the first month’s rent to place a resident in your home for you.
- Lease renewal fees: this should be a small fee and it varies from company to company. This fee occurs every year when the tenant renews their lease.
- Maintenance markups: be careful with these fees, as many property management companies markup the maintenance fees by 10%-15%.
Mentioned in the show:
- His Phone number: (904)-677-6777
- His LinkedIn
Learn how to grow your portfolio and reach incredible success the right way! Visit us here for everything you need to know: www.shineinsurance.com/reiclarity.
Special thanks to Gregg Cohen for taking the time to share so many great insights with us
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