Any experience with Norada Real Estate?

Question

I live in southern CA, and for that reason, I can't invest locally. I came across Norada Real Estate and have been absolutely blown away. Marco Santarelli, the founder has a pod cast that I've been listening to. His knowledge and ability to analyze the market is extremely impressive. I'm new to this business, and feel as if Norada can really help guide me through this for the first time. Granted, I don't plan to solely depend on them, and I'm doing my own research. I just finished Brandon Turner's book on rental properties, and plan to continue to read more.

I understand that Norada is a promoter, and prefer that given that they are agnostic in how they recommend properties. I am curious to know what the typical fees are associated with the operator they refer you to though. Is it typically a flat percentage fee based on the appraisal? What percentage of the cut is typical?

I've seen some posts about Norada on here, but they are older and I wanted to see if anyone else has recently gone through them. If you have, I'd love to hear about your experience.

Thanks.

Marco Santarelli · Answer

Hi @Anthony Jasmine — Welcome to BiggerPockets.

Thanks for your kind words and comments. I truly appreciate it, and I’m glad you’ve been impressed so far.

I’m also glad you enjoy my podcast. Educating yourself is very important, so continue to do so. And Brandon‘s book is great as well, as many others out there.

NO CHARGE. What I mean is Norada Real Estate Investments does not charge its clients anything at all. Norada does not take a partnership role or a “cut” of anything. The properties are 100% yours alone.

I’m glad you see the value of being agnostic. Not just market agnostic, but service provider agnostic. The best way to be unbiased is to not be married to anyone.

There are more current Norada posts here on BP. They're just peppered all over.

Feel free to contact one of our Investment Counselors to get as many references and testimonials as you like.  Just ask!

You can also reach out to me anytime you like. :)

Continued success!

Melanja K Jones · Answer

Beware of Norada and their recommendations.

I live in Southern California and bought an investment house in the midwest through their recommendations.

Several takeaways-

1. the ProFormas are complete fiction, listing 5-10 percent for vacancy and repairs and on the flip side, steady growth on appreciation and rent increases. One tenant turn after a year and a half completely destroyed all cash flow for those two years and the next 5 years. When the initial tenant broke the lease (after not paying rent for a month and a half) the PM advised me to lower the rent instead of raising it as advertised in the initial proforma.

2. Property management. I cannot stress enough how important a trusted PM is out of state. Norada told me over and over that this PM was "one of the best in the business." However the tenant was constantly late with rent, the lease was written so that the PM kept all late fees (thus incentivising late payments), and after being assured that this was a good tenant on renewal, 6 months later I was handed a $3500 repair bill for the initial tenant turn. Then the website for the PM company crashed just as my property was to be listed for rent and their main point of contact left town. Paperwork and billing was poorly explained and often incorrect. At that point I had enough and moved my property to another company, first having to pay a $500 early termination fee and an imaginary cleaning fee to ransom my property. The new PM found several other essential repairs that had not been handled by the Norada approved company (leaking pipes, non- grounded electrical outlets) so there was another huge repair bill. The new PM did rent the property for more money. Three months after I left the first PM,  I started receiving emails that they were being investigated for fraud. Looking back on the sketchy documentation for the initial repairs I feel was scammed. $780 to repair one window? In a house that only rents for $1095? Clearly Norada does NOT vet the out of state managers and I cannot emphasize enough how stressful and difficult this has been because of that. Every month there was some kind of disaster

3. Mis-represenation of tax benefits. As I was exploring the idea of buying a property through Norada, they extolled the out of state tax benefits because I live in a high income tax state. THERE ARE NO TAX BENEFITS UNLESS YOU ARE ABLE TO PROVE TO THE IRS THAT YOU ARE SPENDING MORE THAN 750 HOURS ON REAL ESTATE. For most people you will only save a little money on any PROFITS if you have a loss the first year. If the property loses  money, you just.. lose money.

4. Lack of a exit strategy. So now what? Now that I have owned this property for almost 2 years and lost thousands and thousands of dollars, what is the next step? Norada has no guidance or infomation on that.

I was really excited to buy my first investment property because of the high price of entry on the coast but I would have been better off taking that money and buying eggs or lottery tickets.

David Kanarek · Answer

see Facebook group:

Norada Capital Default Notice:

If you are one of the investors, please see Facebook page with agencies and links to file complaints !

Alex Tank · Answer

Norada is another Bernie Madoff. A creator of PONZI Scheme.

Alex Tank · Answer

DANGER DANGER DANGER!!!

Ponzi Scheme!

Please join me to suit Marcos and his companies! Let's put him in the jail same way Bernie Madoff did!!!

I lost money, hope you don't!

They already sent Default Letter!

Send review to every platform so other will not become victim.

Let word know about this PONZI Scheme! Go online let them know!

https://maps.app.goo.gl/1Y7LfRejLpsRkruAA

Any experience with Norada Real Estate?

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