Rent to Retirement?

[Eduardo Barcena jr]

Does anyone have any experience working with Rent to Retirement? I have been looking into it because they’re a frequent sponsor on the podcasts and wanted to get some feedback. Thanks!

[Zach Lemaster]

@Pretty Khare

Great, thanks for sharing.  You are 100% correct that the various loan options you use will affect the cash to close needed, but closing costs should not be factored into long term cash flow analysis.  Just the first year acquisition analysis.  I'm not sure about what is being included in your insurance quote.  We run the pro forma at $850, but most quotes we see are $600 to $700.  I can send you those insurance providers that quote those amounts if you reach out directly.  I think $1,800 if far too high.  My personal builds in the area have a $640 annual premium.  This is definitely affecting your analysis.  I can confirm we can get mngt to do better than 8%.  That is the benefit to working with our network where we have negotiation power based on volume.  The septic treatment will also be less expensive than quoted.  I understand the want to be conservative in running analysis, but it's important to consistently be refining the analysis investigating all areas to lower expenses like with insurance.  One other point to look in the first couple of years is property taxes.  We show tax amounts above $3k which would reflect a full taxable value.  It will likely take 2-3 years to be fully assessed to reflect that tax amount.  Your first year the taxes likely will be less than $1k allowing quite a bit more cash flow than projected.  The taxes will go up over time, but so will rents so that must be factored in to a proper analysis.  Just some things to consider as you run some various analysis on this.  Either way your slice it the equity is there to make this a great investment with plenty of options.  In my experience it is very difficult to find new construction in a growing market, good neighborhood class that still cash flows & has significant, immediate equity.  Side note, we are about to release some TX builds are in high demand. They are completed now, or will be soon.  Not as much equity as these, but still cash flow well & obviously TX is one of the hottest places to invest currently.  Stay tuned for those.  Great discussion here that many people will benefit from reading.  Feel free to reach out to me directly if you want to set up a time to go through this in greater detail.