Detailed report of my recent (bad) experience with Rent to Retirement

[Mendy M.]

Here’s a pretty detailed report of my recent (bad) experience with Rent To Retirement:

I contacted Rent To Retirement about buying a property or properties with them. The experience was pretty awful. Thank God I didn’t go for it in the end.

I had my call with one of their “investment strategists” - he seemed kind of sluggish and didn’t seem especially kind or transparent to me. He wasn’t especially knowledgeable or helpful.

When I started talking to him about the risks of overleveraging - he claimed to me that there is no added risk to that and that if I had a foreclosure, it would barely damage my credit file, and I’d be able to continue life as normal continuing to get mortgages afterward.

A little Google search showed me how that was false - the Lender could sue you, and continue to go after you, even after foreclosing on the property - if they are still owed money on the loan, after seizing your property. Plus, you are unlikely to be able to get any normal mortgage for years to come after a forclusure.

But I thought okay, I’ll still follow through with this.

I got preapproved for a mortgage. Then I followed up with my Rent To Retirement Rep.

We discussed various properties, I got the sense that whenever I started digging into the details of their numbers, he got uncomfortable, and was evasive, he also just didn’t know a lot of things.

Then he emailed me that night that two properties just came on the market, and if I was interested, I would need to respond fast. I emailed him that I had interest in one of them, and some questions about the properties, to which he never responded. For example - the amount that they put down in their brochure of the property, property tax was extremely low - being that the property was assessed before the rehab was done, and was therefore worth extremely little when it was appraised by the City. So I asked: When the city reassess the property pretty soon, will property tax amount go up a lot? To which he never responded.

Then I spoke to him over the phone later that day, and he told me, that unless I answer him if I wanted to buy the property within a few hours, I will lose the chance to get this property, claiming that there will likely not be such chances again in the future. So I told him I will do some research and get back to him very soon.

I started crunching some numbers.

I decided to do some research – I spoke to property managers and real estate agents in the area. They told me the property was significantly overpriced – even if it was fully rehabbed and renovated very well.

They also said that the amount the property could pull in rent was much less than the amount that Rent To Retirement claimed it would be.

Rent To Retirement also did not account for any amount of money for closing costs, they accounted for maintenance costs being at 3%, which is considered extremely low. They accounted for property management - somehow being free (though they claim they could have a deal for it to be free for year one only). I checked with their lenders, and the rates that Rent To Retirement put down in the brochure, were significantly lower than what they were able to offer.

Now my Rent To Retirement rep emailed me claiming that the property was sold to somebody else, and it will be rented out for even more than they claimed it would go for - I find that very off, being that I checked on Zillow and there was no property in that area listed for rent, anywhere close to that price. Plus, I trust property managers in that area more than Rent To Retirement, being that they don’t have incentive to claim that it will rent for a higher price than it would...

I also think that it is extremely strange that Rent To Retirement does not have a single non five star review. Even the most well rated and run companies products are rated at Best 4.8 or 4.9 star, how can Rent To Retirement’s rating be higher than that?!

Especially, given that we are dealing with a company that deals with real estate, where there are many more variables and things that could go terribly wrong.