Spartan Invest/Atlas Property Management/ Turnkey providers

[Walter Pineda]

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

[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