Rent to Retirement experience

[Arjun S.]

Hello BP!

Here is my frank 2 cents! I recently closed on my 1st out of state property and in the currently in the process of closing on a 2nd one after learning about turnkey rentals and coming across rent to retirement on BP. 

Setting right expectations and communication is very important to me since I usually refer my friends/family who are very much into rental investing to someone that I have had a pleasant experience with.

1st out of state property - I worked with Eric who is very knowledgeable, highly responsive and frankly went above and beyond to address all my questions/concerns. Property had a tenant right from day one and I was put in touch with lenders, title, property management, insurance providers who were all great. Property pricing/ROI aligned with the original expectations on website. Appraisal came in 22K over purchase and I had an excellent start to my out of state investment/passive income journey and so far have a good cash flow on this property in the past 3 months. Overall a very pleasant experience for a 1st out of state rental investment. Do your own DD to take into account a higher risk than what is mentioned i.e vacancy/capex items/insurance rates and other costs since somewhere down the road you might be up for surprises if this is not factored in and you just go based on the numbers on the site (which is generally true for any turnkey investment and not just RTR)

2nd property - This is a new build and again Eric has helped me with every step in the process to educate me on how the overall process works and put me in touch with private lenders, builders etc. Land permit takes 2months followed by a 6months of build cycle.

To start off I went based on my previous (set) expectation on the numbers that were on the site. 

Land cost - Turned out to be 44% higher than what was on the site since overall prices started shooting up. This also might mean resale value will be higher. But I was thrown off by this large jump which probably as a buyer anyone would!

Private loan cost - 8% rate (signed a contract/promissory note). Now that the land permit is back 2 months later as expected, this rate is not being honored and is going up to 10%

Build cost - Signed a contract based on the price on website as of Apr 24th which said price is valid till May 1st. Signed a contract for the price mentioned on the website. Today I am being told the price was only valid till the day mentioned on the website and now overall costs have gone up my build cost is up 10%.

Though I understand this is a very common scenario for new builds where original price can change significantly for any reason including the recent lumber pricing (which B TW has gone down 3X since the time I signed contract), I did not factor such drastic price changes. I would have preferred if the right expectations were set right from day one in which case I would really have cared even if price went up 20%! . However to note this also does mean resale value for these including the rents can now be significantly higher but as a buyer hasn't been a pleasant experience. Which might change in a few months as we move through the process. But a lesson for me was to not go based on the numbers on any website and not just RTR for new builds. 

I will continue to update my overall experience as I move forward with my passive investment journey