Another Another Spartan Invest Turnkey Case Study

[Pak Wu]

Hi everyone,

I used this forum before deciding on a turnkey provider and have found these case studies to be extremely useful. Wanted to give my experience so far, 6 months into the ownership process. Beginning of this year, I made a new year resolution to dip my feet into real estate. After listening to countless BP podcasts, I've finally pulled the trigger in the beginning of January on a property in Montevallo, AL with Spartan Invest. 

Here were the financials:

$97,000 purchase price
$615 taxes, $650 insurance
$935 rent
1,360 sqft, 3 bed 2 baths
Built 1948
1.10 Acres lot
5.25% interest rate, 20% down
Total out of pocket: $23.5K

I had calculated high CapEx/Maintenance/Vacancy with this forum's advice so cash flow was minimal at about $98 a month.

I reserved it May 31st and closed June 24th 2019. Buying process was painless and quick but expected more pictures/property details. Didn't find out about a big shed with electricity on property until afterwards when looking through tax records and asking.

Property was rented by the time I closed which was nice. I was charged first month's rent and then I started getting deposits a month later. I got cash flowing July and August and then got devastating news. 

They had moved my tenant out and into one of their other properties because the neighbor was harassing the tenant to the extent cops were called and property management had a warrant for the neighbors arrest. I got partial rent for the month the tenant moved out. 

Initially, they suggested to sell the place and get me into another property. I thought great, maybe they will just substitute me into another house with minimal costs to me! Knowing how much they have paid for the house and not being a gut rehab, there would have been a lot of lee-way in my mind. Once I got more details, I found out that was not the case and I would only be saving on some fees on the next house (still have to pay all closing costs) and 50% off selling commission which would still mean a huge financial hit 3 months into ownership.

Knowing turnkeys cannot be sold at the same price especially after a few months, I have decided to put it up for lease again. No takers yet so it has been vacant since September.

Please let me know if you guys had encountered this situation and have any advice or questions!