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Disappointing experience with REI Nation PPMG property management
Want to share my experience doing turnkey with REI Nation.
I started buying my first property with them back in the summer of 2020. The property is great. I was very specific and insisted on a class A property. To date, the property is rented and with very few issues.
With a good start, I decided to purchase a second property with them last summer 2021. And this property has given me more headaches than I want. Ashley recommended this property to me as a class B property and mentioned super low tax rate as a bonus point. Trying to diversify my portfolio and branch into class B properties, I said yes. First, immediately after I purchased the property, tenant stopped paying. They got rental assistance for the last 3 months of 2021, but was not able to get anything for 2022. They secretly moved out without paying 4 months of rent for 2022, and of course trashed the place.
Second, make ready process from PPMG, their property management company. They quoted me $3745.55 (with 15% up charge) for all the things they are going to do. A week later, they told me someone broke in and stole a bunch of things. So they need another $488.75 of contribution(15% up charge). To which I said okay, please try to make the place ready as soon as possible to prevent future damage. Then another week later, the yard service needs another $1150 (15% up charge) because it’s more work than they previously estimated. Today is the day they promised fix up is going to be done, to which they emailed sorry, the house got broken in again, we need another $805 (with 15% up charge).
I’m super disappointed at the property management company, not only is the eviction taking 4 months but also the repeated broken in and damages. If this is a known issue, shouldn’t they do something differently?
Looking back, I think the class B is probably an inflated rating given the tenant issues and petty crimes in the neighborhood. The low property tax should have been an alarm for me. I think I'll continue to build up my portfolio with Turnkeys (have a busy job) but I'll stick with class A in the future and be more careful with property selection. I'm not sure if I'd like to continue with REI Nation and PPMG, given how they handled their class B property.
Welcome to real estate investing. Those things can just as easily happen in a class A property as well.
#2 Personal Finance Contributor
- Investor
- Greenville, SC
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#2 Personal Finance Contributor
- Investor
- Greenville, SC
Check out the median household income of the zip code and that will provide an indication of the property class. And I agree with your assessment that it's likely not B class (and you won't find A class from a provider).
Quote from @Russell Brazil:
Welcome to real estate investing. Those things can just as easily happen in a class A property as well.
#2 Personal Finance Contributor
- Investor
- Greenville, SC
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#2 Personal Finance Contributor
- Investor
- Greenville, SC
Quote from @Kewei Qu:
Quote from @Russell Brazil:
Welcome to real estate investing. Those things can just as easily happen in a class A property as well.
A-class are the top housing communities, which are million+ dollar properties in most markets.
Quote from @Kewei Qu:
Want to share my experience doing turnkey with REI Nation.
I started buying my first property with them back in the summer of 2020. The property is great. I was very specific and insisted on a class A property. To date, the property is rented and with very few issues.
With a good start, I decided to purchase a second property with them last summer 2021. And this property has given me more headaches than I want. Ashley recommended this property to me as a class B property and mentioned super low tax rate as a bonus point. Trying to diversify my portfolio and branch into class B properties, I said yes. First, immediately after I purchased the property, tenant stopped paying. They got rental assistance for the last 3 months of 2021, but was not able to get anything for 2022. They secretly moved out without paying 4 months of rent for 2022, and of course trashed the place.
Second, make ready process from PPMG, their property management company. They quoted me $3745.55 (with 15% up charge) for all the things they are going to do. A week later, they told me someone broke in and stole a bunch of things. So they need another $488.75 of contribution(15% up charge). To which I said okay, please try to make the place ready as soon as possible to prevent future damage. Then another week later, the yard service needs another $1150 (15% up charge) because it’s more work than they previously estimated. Today is the day they promised fix up is going to be done, to which they emailed sorry, the house got broken in again, we need another $805 (with 15% up charge).
I’m super disappointed at the property management company, not only is the eviction taking 4 months but also the repeated broken in and damages. If this is a known issue, shouldn’t they do something differently?
Looking back, I think the class B is probably an inflated rating given the tenant issues and petty crimes in the neighborhood. The low property tax should have been an alarm for me. I think I'll continue to build up my portfolio with Turnkeys (have a busy job) but I'll stick with class A in the future and be more careful with property selection. I'm not sure if I'd like to continue with REI Nation and PPMG, given how they handled their class B property.
Nate from REI Nation reached out today and discussed possible ways we can mitigate the issue to go forward. I'll keep the thread posted on the discussion. He did say that this is a pretty unusual situation and they will take a closer look at it.
In addition, want to clarify that REI Nation doesn’t categorize their properties into buckets like ABCD. When considering this property, I asked Ashley if I should worry about this is a B- neighborhood. To which I got the answer that they do extensive research and over the long run the property should generate profits. Apologize for mis-representing that fact.
Quote from @Mike Dymski:
Quote from @Kewei Qu:
Quote from @Russell Brazil:
Welcome to real estate investing. Those things can just as easily happen in a class A property as well.
A-class are the top housing communities, which are million+ dollar properties in most markets.
I’m also interested to know how would you put medium income into perspective, like what’s the scope are you comparing to. Since a medium income in SF or NYC is gonna be very different rest of the country.
Personally their story seems a bit off to me. Depending on the size and type of turn, if a property was trashed I think $3700 would be a great price to get it back rent ready so I can't say I'm shocked to hear of the random 'break ins' which led to additional charges. We typically see full turns on 1300-1800sf homes run between $4-6k. That's what I would consider to be trashed and repairs would include a trash out, full paint, changing carpets, fixing broken fixtures, deep clean, etc.
Also as unfortunate as break-ins are, I think most would love to walk away with having a bunch stolen and it costing less than $500 to get back up and running. I don't know what could be taken from a vacant home that would only cost $488. Maybe a broken window and lock change or a used fridge and stove? Are they providing a line items on invoices showing exactly what was being done, do those prices seem reasonable? Are you being sent before, during and after photos or photos after the break in? Is there police reports to support their claims?
Best of luck on a the second half of 2022.
#2 Real Estate Horror Stories Contributor
- Property Manager
- Royal Oak, MI
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#2 Real Estate Horror Stories Contributor
- Property Manager
- Royal Oak, MI
@Kewei Qu we manage a lot of Class B & C properties, so we're familiar with break-ins unfortunately.
Having a property broken into multiple times in a short period of time is usually because of:
1) Neighborhood crackhead keeps coming back
2) Previous tenant is playing games
3) Just a bad area
4) Just bad luck
How did they break in?
What deterrent measures are being taken?
If doors being kicked in, here's a cheap deterrent:
-
Property Manager
- 248-209-6824
- http://www.LogicalPM.com
- [email protected]
What kind of property is this? I would recommend self managing. I am self Managing a 12 plex and it is a C class property. It wasn’t pretty when we started (had to evict a tenant) but we have full control of our property. We use rentredi and it works great! Reach out if you have any questions
Quote from @Ryan Robbins:
Personally their story seems a bit off to me. Depending on the size and type of turn, if a property was trashed I think $3700 would be a great price to get it back rent ready so I can't say I'm shocked to hear of the random 'break ins' which led to additional charges. We typically see full turns on 1300-1800sf homes run between $4-6k. That's what I would consider to be trashed and repairs would include a trash out, full paint, changing carpets, fixing broken fixtures, deep clean, etc.
Also as unfortunate as break-ins are, I think most would love to walk away with having a bunch stolen and it costing less than $500 to get back up and running. I don't know what could be taken from a vacant home that would only cost $488. Maybe a broken window and lock change or a used fridge and stove? Are they providing a line items on invoices showing exactly what was being done, do those prices seem reasonable? Are you being sent before, during and after photos or photos after the break in? Is there police reports to support their claims?
Best of luck on a the second half of 2022.
Quote from @Drew Sygit:
@Kewei Qu we manage a lot of Class B & C properties, so we're familiar with break-ins unfortunately.
Having a property broken into multiple times in a short period of time is usually because of:
1) Neighborhood crackhead keeps coming back
2) Previous tenant is playing games
3) Just a bad area
4) Just bad luck
How did they break in?
What deterrent measures are being taken?
If doors being kicked in, here's a cheap deterrent:
Thanks for the tip! They broke the window, any suggestions on how to deal with that?
Quote from @Alex Ramirez:
What kind of property is this? I would recommend self managing. I am self Managing a 12 plex and it is a C class property. It wasn’t pretty when we started (had to evict a tenant) but we have full control of our property. We use rentredi and it works great! Reach out if you have any questions
#2 Real Estate Horror Stories Contributor
- Property Manager
- Royal Oak, MI
- 4,707
- Votes |
- 8,109
- Posts
#2 Real Estate Horror Stories Contributor
- Property Manager
- Royal Oak, MI
@Kewei Qu Regarding windows, the options are typically:
1) Board them up with plywood
2) Secure with metal screens http://www.dawgsinc.com/
3) Install a LOUD alarm
-
Property Manager
- 248-209-6824
- http://www.LogicalPM.com
- [email protected]
Quote from @Drew Sygit:
@Kewei Qu Regarding windows, the options are typically:
1) Board them up with plywood
2) Secure with metal screens http://www.dawgsinc.com/
3) Install a LOUD alarm
Quote from :
Quote from :
Personally their story seems a bit off to me. Depending on the size and type of turn, if a property was trashed I think $3700 would be a great price to get it back rent ready so I can't say I'm shocked to hear of the random 'break ins' which led to additional charges. We typically see full turns on 1300-1800sf homes run between $4-6k. That's what I would consider to be trashed and repairs would include a trash out, full paint, changing carpets, fixing broken fixtures, deep clean, etc.
Also as unfortunate as break-ins are, I think most would love to walk away with having a bunch stolen and it costing less than $500 to get back up and running. I don't know what could be taken from a vacant home that would only cost $488. Maybe a broken window and lock change or a used fridge and stove? Are they providing a line items on invoices showing exactly what was being done, do those prices seem reasonable? Are you being sent before, during and after photos or photos after the break in? Is there police reports to support their claims?
Best of luck on a the second half of 2022.
@Kewei Qu 15 percent overcharge on repairs is not typical.. Its the charge you have agreed to.
#5 Market Trends & Data Contributor
- Investor
Quote from @Kewei Qu:
Want to share my experience doing turnkey with REI Nation.
I started buying my first property with them back in the summer of 2020. The property is great. I was very specific and insisted on a class A property. To date, the property is rented and with very few issues.
With a good start, I decided to purchase a second property with them last summer 2021. And this property has given me more headaches than I want. Ashley recommended this property to me as a class B property and mentioned super low tax rate as a bonus point. Trying to diversify my portfolio and branch into class B properties, I said yes. First, immediately after I purchased the property, tenant stopped paying. They got rental assistance for the last 3 months of 2021, but was not able to get anything for 2022. They secretly moved out without paying 4 months of rent for 2022, and of course trashed the place.
Second, make ready process from PPMG, their property management company. They quoted me $3745.55 (with 15% up charge) for all the things they are going to do. A week later, they told me someone broke in and stole a bunch of things. So they need another $488.75 of contribution(15% up charge). To which I said okay, please try to make the place ready as soon as possible to prevent future damage. Then another week later, the yard service needs another $1150 (15% up charge) because it’s more work than they previously estimated. Today is the day they promised fix up is going to be done, to which they emailed sorry, the house got broken in again, we need another $805 (with 15% up charge).
I’m super disappointed at the property management company, not only is the eviction taking 4 months but also the repeated broken in and damages. If this is a known issue, shouldn’t they do something differently?
Looking back, I think the class B is probably an inflated rating given the tenant issues and petty crimes in the neighborhood. The low property tax should have been an alarm for me. I think I'll continue to build up my portfolio with Turnkeys (have a busy job) but I'll stick with class A in the future and be more careful with property selection. I'm not sure if I'd like to continue with REI Nation and PPMG, given how they handled their class B property.
This seems to be a common trend. Break-ins happen at such staggering costs for vacant homes, cause they are stealing appliances/capex stuff. My suspicion is they are robbing peter to pay paul. I'm searching for negative reviews, found another I'll bump here shortly. But that's the real telling of service. This "trend" of break ins with them is like the other I'm about to bump.
Wanted to give this thread an update since we've finally resolved the issue and landed a new tenant. REI nation offered to waive all of the 15% premium for the repairs and fixes happened during this period. I also requested 50-50 splitting the 10 months of rent loss which they later agreed to. At the end, I think REI is a workable partner, but some properties are not that passive, at least not for me.
@Kewei Qu I just wanted to share my own experiences with buying turnkey rentals as a way to get started in real estate investing. When I first began, I was working a full-time job as an engineer, and buying properties in high-priced areas like Seattle was challenging due to my personal time constraints and poor Rent-to-Value Ratios.
I want to clarify that forums shouldn't become a platform to unfairly criticize providers. While I can't speak specifically about REI Nation, I've heard good things about them! I even visited some of their properties in Texas back in 2012 and liked what I saw.
Investing always carries risks, even with turnkey rentals. Issues may arise during the transaction or especially during the operation of the properties - which are not fault of the TKP. When I owned 11 turnkey rentals in 2015, I experienced occasional losses on some of them for the annual basis, but overall, the performance was strong, and I earned good cash flow. When I sold most of those properties in 2017 and 2018, I also benefited from the appreciation which I had always thought of as the icing on top of the cake.
I want to address some earlier comments about relying too heavily on brokers or providers for information. It's not advisable to take their word as gospel, especially when it comes to classifying a location or property. Sometimes what they claim as a class B property may actually be a class C location. It's crucial to visit the location firsthand, even in lower-priced areas, to make an informed decision as a turnkey buyer. That falls under the due-dilligence of the investor alone. Third party property managers can help though.
Turnkey providers generally do a good job and need to make a profit. However, for accredited investors, it's worthwhile to consider scaling up to syndications and private placements as limited partners (LPs). These options offer better alignment of interests, with the general partner having more skin in the game, and you, as an LP, having a say in future operations. A property management company that gets compensated even if you don’t have a well preforming rental… this is what's tough about being a landlord as opposed to passive LP partner.
I just wanted to emphasize that on these forums there are a lot of DIY enthusiasts who may speak negatively about turnkey providers. However, for higher net worth investors, turnkey rentals can be a great starting point despite being slightly overpriced. They help you overcome the time hurdle, and they certainly worked for me.
Quote from @Lane Kawaoka:
@Kewei Qu I just wanted to share my own experiences with buying turnkey rentals as a way to get started in real estate investing. When I first began, I was working a full-time job as an engineer, and buying properties in high-priced areas like Seattle was challenging due to my personal time constraints and poor Rent-to-Value Ratios.
I want to clarify that forums shouldn't become a platform to unfairly criticize providers. While I can't speak specifically about REI Nation, I've heard good things about them! I even visited some of their properties in Texas back in 2012 and liked what I saw.
Investing always carries risks, even with turnkey rentals. Issues may arise during the transaction or especially during the operation of the properties - which are not fault of the TKP. When I owned 11 turnkey rentals in 2015, I experienced occasional losses on some of them for the annual basis, but overall, the performance was strong, and I earned good cash flow. When I sold most of those properties in 2017 and 2018, I also benefited from the appreciation which I had always thought of as the icing on top of the cake.
I want to address some earlier comments about relying too heavily on brokers or providers for information. It's not advisable to take their word as gospel, especially when it comes to classifying a location or property. Sometimes what they claim as a class B property may actually be a class C location. It's crucial to visit the location firsthand, even in lower-priced areas, to make an informed decision as a turnkey buyer. That falls under the due-dilligence of the investor alone. Third party property managers can help though.
Turnkey providers generally do a good job and need to make a profit. However, for accredited investors, it's worthwhile to consider scaling up to syndications and private placements as limited partners (LPs). These options offer better alignment of interests, with the general partner having more skin in the game, and you, as an LP, having a say in future operations. A property management company that gets compensated even if you don’t have a well preforming rental… this is what's tough about being a landlord as opposed to passive LP partner.
I just wanted to emphasize that on these forums there are a lot of DIY enthusiasts who may speak negatively about turnkey providers. However, for higher net worth investors, turnkey rentals can be a great starting point despite being slightly overpriced. They help you overcome the time hurdle, and they certainly worked for me.
@Lane Kawaoka, thank you for sharing your perspective. Can you share more about your suggestions on syndications or private placements? Would love to understand these options better and maybe hear about any examples you may have in mind.