Spartan Invest/Atlas Property Management/ Turnkey providers

Birmingham, Alabama
General Real Estate Investing
4yFollow

Spartan Invest/Atlas Property Management/ Turnkey providers

Walter Pineda
Downey, CA · Member since 2022 · 81 posts · 48 votes

Hi! a day in the life of an investor. First of all, I had 100k to invest with in 2021 and I decided to use a turnkey provider and that was my first mistake I should have taken a Rookie Boot Camp with BP instead. My reasoning was that the market was changing so interest rates would increase and inflation would eat that money if I didn't make a move. I have properties in Memphis and one in Alabama with Spartan investment. The truth about investing is that you will run into some problems with renters that destroy the property and section 8 renters that could not or will not pay rent. One of the properties in Memphis the renter broke the security door and in the other property a tree fell onto the yard of the property, so I had to pay $800 lol. 

In the property in Alabama Atlas is managing it and the tenant has applied for section 8 and has not paid rent for 3 months I have sent numerous emails to Natelie the portfolio manager with no real assurance when the section 8 or the renter will pay rent. The response is always "waiting on section 8 to respond". I had a similar experience with one of the properties in Memphis, but that management company was more proactive in getting paid and its now cash flowing positive but still not very happy with their services. I have asked for a reason why section 8 takes 3 months to begin payment but no real good reason yet.

I decide to sign up for BP rookie bootcamp this month and ready to learn more about investing. If you are new to investing, please reach out to me because I'm willing to share what I learned so far.

Thank you for being a part of our BP community!

Walter Pineda

1Reply
213 views

Most Popular Reply

Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
4y

@Walter Pineda

The biggest challenges with Turnkey providers:

1) Terrible renovation work - we've taken over many properties that investor bought turnkey and they were shocked to learn the true condition of their property from our TakeOver video.
---So, get a GREAT property inspector NOT recommended by the turnkey company to avoid bias.

2) Misrepresenting Property Class - have seen many turnkey providers in Metro Detroit area sell OOS investors Class C properties as Class B.
---So, learn the neighborhoods where you plan to invest and use Google Streetview to virtually explore them.

3) Poor Tenant Screening - they typically can't sell a property until they place a tenant. So, they have a conflict of interest in waiting for the right tenant.
---So, insist on them providing the rental application and supporting docs for your review. This means YOU need to learn how to evaluate a rental application!

4) Poor Property Management - Where do you think a turnkey provider will put their best staff, on selling properties and making $5k+/transaction or on property management and making $80/month transactions?
---So, ask about their standard operating procedures and make sure your management contract has an easy termination clause.

What are your options if you experience one of the above? Everyone thinks they can sue to solve the problem.

Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

Unfortunately, the majority of investors that experience terrible service from turnkey companies, figure out that it's not worth spending tens of thousands of dollars suing their turnkey provider and just move on - which allows the turnkey provider to not change their ways and stay in business:(

You should also check out this BP thread about the topic:

https://www.biggerpockets.com/forums/88/topics/976647-turnkey-company-suggestion?highlight_post=5648876&page=1#p5648876

[email protected]248-209-6824
Logical Property Management4.9469 Reviews
WebsiteView Page
5Reply
See this reply in the discussion

13 Replies

Jump to latestLatest
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    4y

    Hi Walter, I am an out of state investor and have worked with multiple turnkey companies so feel free to reach out if you want to connect. 

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    4y

    @Walter Pineda

    The biggest challenges with Turnkey providers:

    1) Terrible renovation work - we've taken over many properties that investor bought turnkey and they were shocked to learn the true condition of their property from our TakeOver video.
    ---So, get a GREAT property inspector NOT recommended by the turnkey company to avoid bias.

    2) Misrepresenting Property Class - have seen many turnkey providers in Metro Detroit area sell OOS investors Class C properties as Class B.
    ---So, learn the neighborhoods where you plan to invest and use Google Streetview to virtually explore them.

    3) Poor Tenant Screening - they typically can't sell a property until they place a tenant. So, they have a conflict of interest in waiting for the right tenant.
    ---So, insist on them providing the rental application and supporting docs for your review. This means YOU need to learn how to evaluate a rental application!

    4) Poor Property Management - Where do you think a turnkey provider will put their best staff, on selling properties and making $5k+/transaction or on property management and making $80/month transactions?
    ---So, ask about their standard operating procedures and make sure your management contract has an easy termination clause.

    What are your options if you experience one of the above? Everyone thinks they can sue to solve the problem.

    Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

    Unfortunately, the majority of investors that experience terrible service from turnkey companies, figure out that it's not worth spending tens of thousands of dollars suing their turnkey provider and just move on - which allows the turnkey provider to not change their ways and stay in business:(

    You should also check out this BP thread about the topic:

    https://www.biggerpockets.com/forums/88/topics/976647-turnkey-company-suggestion?highlight_post=5648876&page=1#p5648876

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    5Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y

    Everything that Drew said summed everything. I'm wondering if any Bootcamp will change that.
    For me, I realized the better course is to buy a turnkey that does not have tenants, it was way better than having the unit occupied. If they just filled up the unit after rehab that's not a good sign for me. Or only buy in B-class neighborhoods.

    Regarding inspection, Run at least two inspections ! Also when you buy in a buyer-beware state like Alabama there's not much you can do.

    1Reply
  • Maureen Woods
    Real Estate Investor · San Diego, CA · Member since 2009 · 2 posts · 4 votes
    4y

    Hi Walter,

    Maureen McCann here, VP of Sales and Co-Founder of Spartan Invest. I wanted to take a moment to respond to your post. 

    We agree that this situation was frustrating, to say the least! I'm so sorry you experienced this situation. Natalie was correct in her communications, though. We don't receive a reason or rhyme as to why Section 8 payments take longer to process. The Housing Authority certainly has its issues and we see that on the front end, which is why we simply don't advocate for Section 8. We are happy to facilitate the relationship on behalf of our investors if they should choose to accept those types of payments. The biggest reason for this is due to the loss in accountability that we are able to hold our tenants too.

    The legal action that we're able to take if necessary is very effective in securing delinquent or late payments and you lose that with Section 8. We share your frustrations completely. Despite these challenges, we work hard to build relationships with the Jefferson and Tuscaloosa Housing Authorities so that we can better assist our investors. During this particular case with the Tuscaloosa Housing Authority, the staff was dealing with some turnover, and though our AR Coordinator and Director of PM Operations were both reaching out for updates, we were not provided with adequate information regarding this ledger. 

    During our team's conversations, we were pushing this particular tenant to submit paperwork that would allow Section 8 to cover some utility fees in addition to rent. Government assistance is great but it is not without its issues and it is often all too slow! Again, I couldn't agree more with your assessment of the situation and the difficulty/frustration. I'm sorry you had to experience this but I'm glad our team was able to work with the Housing Authority on your behalf.

    3Reply
  • Walter Pineda
    OP
    Downey, CA · Member since 2022 · 81 posts · 48 votes
    4y
    Quote from @Drew Sygit:

    @Walter Pineda

    The biggest challenges with Turnkey providers:

    1) Terrible renovation work - we've taken over many properties that investor bought turnkey and they were shocked to learn the true condition of their property from our TakeOver video.
    ---So, get a GREAT property inspector NOT recommended by the turnkey company to avoid bias.

    2) Misrepresenting Property Class - have seen many turnkey providers in Metro Detroit area sell OOS investors Class C properties as Class B.
    ---So, learn the neighborhoods where you plan to invest and use Google Streetview to virtually explore them.

    3) Poor Tenant Screening - they typically can't sell a property until they place a tenant. So, they have a conflict of interest in waiting for the right tenant.
    ---So, insist on them providing the rental application and supporting docs for your review. This means YOU need to learn how to evaluate a rental application!

    4) Poor Property Management - Where do you think a turnkey provider will put their best staff, on selling properties and making $5k+/transaction or on property management and making $80/month transactions?
    ---So, ask about their standard operating procedures and make sure your management contract has an easy termination clause.

    What are your options if you experience one of the above? Everyone thinks they can sue to solve the problem.

    Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

    Unfortunately, the majority of investors that experience terrible service from turnkey companies, figure out that it's not worth spending tens of thousands of dollars suing their turnkey provider and just move on - which allows the turnkey provider to not change their ways and stay in business:(

    You should also check out this BP thread about the topic:

    https://www.biggerpockets.com/forums/88/topics/976647-turnkey-company-suggestion?highlight_post=5648876&page=1#p5648876


     Great insight! I appreciate your feedback.

    0Reply
  • Walter Pineda
    OP
    Downey, CA · Member since 2022 · 81 posts · 48 votes
    4y
    Quote from @Carlos Ptriawan:

    Everything that Drew said summed everything. I'm wondering if any Bootcamp will change that.
    For me, I realized the better course is to buy a turnkey that does not have tenants, it was way better than having the unit occupied. If they just filled up the unit after rehab that's not a good sign for me. Or only buy in B-class neighborhoods.

    Regarding inspection, Run at least two inspections ! Also when you buy in a buyer-beware state like Alabama there's not much you can do.


     Thank you, I'll keep that in mind.

    0Reply
  • Walter Pineda
    OP
    Downey, CA · Member since 2022 · 81 posts · 48 votes
    4y
    Quote from @Maureen Woods:

    Hi Walter,

    Maureen McCann here, VP of Sales and Co-Founder of Spartan Invest. I wanted to take a moment to respond to your post. 

    We agree that this situation was frustrating, to say the least! I'm so sorry you experienced this situation. Natalie was correct in her communications, though. We don't receive a reason or rhyme as to why Section 8 payments take longer to process. The Housing Authority certainly has its issues and we see that on the front end, which is why we simply don't advocate for Section 8. We are happy to facilitate the relationship on behalf of our investors if they should choose to accept those types of payments. The biggest reason for this is due to the loss in accountability that we are able to hold our tenants too.

    The legal action that we're able to take if necessary is very effective in securing delinquent or late payments and you lose that with Section 8. We share your frustrations completely. Despite these challenges, we work hard to build relationships with the Jefferson and Tuscaloosa Housing Authorities so that we can better assist our investors. During this particular case with the Tuscaloosa Housing Authority, the staff was dealing with some turnover, and though our AR Coordinator and Director of PM Operations were both reaching out for updates, we were not provided with adequate information regarding this ledger. 

    During our team's conversations, we were pushing this particular tenant to submit paperwork that would allow Section 8 to cover some utility fees in addition to rent. Government assistance is great but it is not without its issues and it is often all too slow! Again, I couldn't agree more with your assessment of the situation and the difficulty/frustration. I'm sorry you had to experience this but I'm glad our team was able to work with the Housing Authority on your behalf.


     Hi! Maureen thanks for making it right and adjusting the management fees. That type of response makes me more confident that I made the right decision with Spartan Invest.

    1Reply
  • Walter Pineda
    OP
    Downey, CA · Member since 2022 · 81 posts · 48 votes
    4y
    Quote from @Aj Parikh:

    Hi Walter, I am an out of state investor and have worked with multiple turnkey companies so feel free to reach out if you want to connect. 


     I sent you a email. Look forward to hearing from you.

    0Reply
  • Maureen Woods
    Real Estate Investor · San Diego, CA · Member since 2009 · 2 posts · 4 votes
    4y

    Walter,

    Thank you for the nice compliment.  We have built our reputation on doing the right thing.  Integrity is a key ingredient to the success and growth of a business.  We are grateful for your business. 

    Please reach out if I can do anything more for you. 

    Cheers,
    Maureen

    1Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    4y
    Quote from @Walter Pineda:
    Quote from @Aj Parikh:

    Hi Walter, I am an out of state investor and have worked with multiple turnkey companies so feel free to reach out if you want to connect. 


     I sent you a email. Look forward to hearing from you.


     Sounds good. 

    0Reply
  • Mark Byers
    Property Manager · Birmingham, AL · Member since 2015 · 50 posts · 41 votes
    4y

    It's not unusual for Section 8 payments to be delayed, especially when dealing with HABD (Birmingham). Wouldn't necessarily hold this against the PM. I've had situations where we're following up consistently, being told 'you'll get it with next month's distribution' and then they still don't send it and we have to continue to push and follow up again and hope that you get it next month. Section 8 in general, but especially HABD is a headache to deal with and this is part of the game. 

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Mark Byers:

    It's not unusual for Section 8 payments to be delayed, especially when dealing with HABD (Birmingham). Wouldn't necessarily hold this against the PM. I've had situations where we're following up consistently, being told 'you'll get it with next month's distribution' and then they still don't send it and we have to continue to push and follow up again and hope that you get it next month. Section 8 in general, but especially HABD is a headache to deal with and this is part of the game. 


     yup i had about 35 or so SECTION 8 rentals in Bham is SOP for them to take months after the tenant moves in to get your first check.. the PM should know this and explain it up front so your not feeling like your being picked on or your PM is a bozo..  as for damage from tenants just get used to it at one time I owned over 350 C class rentals from Memphis to B ham Jackson Indy etc.. its a constant issue. there simply is no fix for it.. lifelong renters and their kiddos are just tough on houses end of story. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Caleb Bryant
    Rental Property Investor · Huntsville, AL · Member since 2015 · 401 posts · 309 votes
    4y
    Quote from @Drew Sygit:

    @Walter Pineda

    The biggest challenges with Turnkey providers:

    1) Terrible renovation work - we've taken over many properties that investor bought turnkey and they were shocked to learn the true condition of their property from our TakeOver video.
    ---So, get a GREAT property inspector NOT recommended by the turnkey company to avoid bias.

    2) Misrepresenting Property Class - have seen many turnkey providers in Metro Detroit area sell OOS investors Class C properties as Class B.
    ---So, learn the neighborhoods where you plan to invest and use Google Streetview to virtually explore them.

    3) Poor Tenant Screening - they typically can't sell a property until they place a tenant. So, they have a conflict of interest in waiting for the right tenant.
    ---So, insist on them providing the rental application and supporting docs for your review. This means YOU need to learn how to evaluate a rental application!

    4) Poor Property Management - Where do you think a turnkey provider will put their best staff, on selling properties and making $5k+/transaction or on property management and making $80/month transactions?
    ---So, ask about their standard operating procedures and make sure your management contract has an easy termination clause.

    What are your options if you experience one of the above? Everyone thinks they can sue to solve the problem.

    Do you realize how much it will cost to hire an OOS attorney to sue the turnkey company?

    Unfortunately, the majority of investors that experience terrible service from turnkey companies, figure out that it's not worth spending tens of thousands of dollars suing their turnkey provider and just move on - which allows the turnkey provider to not change their ways and stay in business:(

    You should also check out this BP thread about the topic:

    https://www.biggerpockets.com/forums/88/topics/976647-turnkey-company-suggestion?highlight_post=5648876&page=1#p5648876

    Great feedback! I'd add on to number two that when doing google street view, pay attention to the dates the pictures were taken. There are areas in Birmingham, Alabama where the street view photos are 10+ years old and the neighborhood looks significantly worse presently. If the dates aren't close, have someone local take video or a Facetime call through the neighborhood. 

    Also to OP, @Walter Pineda, Section 8 here can be tough to deal with, we've had issues where it took nearly that long to get the info we needed. I'd make some attempts yourself to try to speed along the process. Depending where the property is @Dena Puliatti may be able to help as she places plenty of section 8 tenants and has a good relationship with HSV and surrounding area officials. 

    2Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free