investors, lacking all of the components to provide turnkey rentals to national buyers, are selling properties using the comparable sales approach to value and therefor selling at wholesale prices. Larger firms that have all of the components in place are able to fill the strong demand for these properties at the full retail value by using the income approach to value. Would you rather be selling wholesale or retail? Retail, of course. To be able to sell at retail pricing you have to provide all of the solutions, services and documenta- tion that the large firms offer. THE SOLUTION Once the large investment firms iden- tified these inefficiencies, they created solutions to exploit the opportunities. The turnkey business model involves five steps:
thousands of homes in a single purchase from Fannie Mae and Freddie Mac. A national network of renovation compa- nies could renovate the homes efficient- ly and get them up to code. Having professional management is very important for the passive cash inves- tor. The property management compa- nies they use have national standards on tenant qualifications and online account access. National property management companies are able to qualify and place tenants into these homes while market- ing-platforms targeted investors who were interested in or had already purchased rental properties in targeted areas. A full marketing spectrum of direct mail, web presence and even mobile marketing are all easy platforms to utilize today. Combining those platforms with a proven lead source enables turnkey provid- ers to build a scalable business model.
STEP 1 DETERMINE THE RIGHT RENTAL NEIGHBORHOOD
STEP 2 ACQUIRE THE PROPERTY
STEP 3 RENOVATE THE PROPERTY TO RENT-READY CODE
STEP 4 USE PROFESSIONAL PROPERTY MANAGEMENT
STEP 5 FIND A TURNKEY RENTAL PROPERTY BUYER Large companies were able to induce vendors to create national networks, data solutions and marketing platforms. This is what made the model scalable. Large firms were now able to use data to determine the best rental markets in the country. They could acquire tens of
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