All Forum Posts by: Account Closed

I'd like to ask a question on what type of insurance is best for a house during the rehab phase, before I would rent it out to tenants?  This is the phase after closing but before the tenants actually move in.  Anything can happen, so obviously I would pay for the insurance, but I'm interested in what kind I should get, because first I won't know exactly how long it would take me to rehab the place, so I don't want to go in a situation where I sign up for some insurance which forces me to pay for the full year and I'm done with the rehab in 6 months.  The other point is I'm guessing my insurance would have to change from the rehab phase to the rent-out phase, since it's a different type of risk and the insurance company would obviously have to know exactly which phase the house is in.  Any comments would be greatly appreciated, thanks.

Thanks, I understand.  I'm all about transparency as well, why play games with people, karma kicks in one way or the other :)

Hi folks.  Question here regarding the meaning of working with an agent.  I'm looking to buy a condo/duplex, and searching sites like Zillow and Trulia there are going to be multiple agents advertised on each listing.  I know that real estate agents start blazing fumes when they hear a buyer is working with someone else, which I agree with, since why should the RE waste their time only to have the buyer turn around at the end after multiple calls, trips and spent time, and close with someone else.  However, how does a buyer answer the question of "Are you working with someone else?"  Let's say I called an RE to ask about a property and never went anywhere with it.  Does that mean I am technically working with that RE because I called him a few times and now have to stick with that RE forever?  Does working with someone mean I actually went with the RE to look at the property?  I'm in Philadelphia PA, and want to get to the bottom of this before doing anything.  If I want to buy a TV I can go to Best Buy, Walmart, etc. and no one will ever ask me if I'm working with anyone...but it's different for RE, so I'd like to know what that threshold is which differentiates a cold call from "working with someone".  Thanks in advance!

Thanks for the great replies.  As Randy pointed out, and something which I realized myself, I want the best of both worlds, and that can't happen.  I want someone to do the leg work for me but want them to save me money where they can and do it like "I" want it be done..That's a contradiction in my wants, i.e. I want too much, and it's unreasonable.  It's like if I go to the restaurant and go into their kitchen and tell the cook how to make my meal, that can't happen.  He'll just tell me if I'm so smart I should go home and cook the meal myself, which I completely understand.  Chris and Jay, great points on the "guarantee" concept, I definitely agree with that.  And I'm in that group of people who isn't rich, I didn't get an inheritance from my grandfather and no one ever gave me a hand-out.   Which is why I'm so careful, and which is why I'll spend my time doing as much of this myself as I can, because my time is definitely worth less than the money..just the way it is.  Right now I'm reading articles and blogs to familiarize myself with the lingo and terminology, and then will dive deep into some case-studies and examples..I already see this is a whole science, and has to be approached as such.

Thanks, good points.  I agree, and especially in Philly, there all always opportunities like that.  And doing it myself first will give me so much more experience than otherwise.

Thanks James.  One thing also I'd like to bring up is the renovation costs for beat-up properties.  If the PM/Turnkey Manager is going to handle the renovation, I'm concerned that they'll be the only ones making the decisions about what contracts to get, how much to pay, etc.  What I mean is the following.  Say I can get the contractors and supplies and labor for 10 thousand dollars to fix a place up, and the TK company quotes the work at 20 thousand dollars.  For them, I don't think they have any interesting in saving me money, but have interests in getting their own contractors more business.  I'm sure I wouldn't even be allowed to provide any input to the process, or even enter the property until it's finished.  For this point alone, considering I know I can fix houses cheaper and find ways to do it cheaper by shopping for materials for example, the turnkey concept wouldn't be a fit for me.  It feels like TK is more for hands-off people who are willing to go as far as paying and collecting money from the TK manager, but are not willing to get their hands dirty in the process.  For this reason, a lot of money could be lost and left on the table.  At least that's the way I see it right now.

Thanks everyone, and you're right, the company I just initially exchanged my emails with before stopping due to their lack of response did deal with those bad areas mentioned, with the vandalism, the reoccurring violence on the streets, and that type of thing.  One added benefit to turnkey management companies is I won't have to worry about going into those neighborhoods.  At the same time, I say to myself, why be so afraid to go in there if they're not afraid, what makes them so different.  The other benefit to the bad neighborhoods is the house prices are cheaper, so if real estate does a repeat of 2008, there is not as much room to go down for those houses.  Thanks for all the input.  I definitely have to think more on all the great points before I can arrive to a decision.

Thanks very much for such quick responses, I'm certainly happy to be a in a community here where people are responsive.  When I emailed a turnkey management property a few months ago, I got ignored for days and then was given a "sorry I was out of the country" response, after I sent follow-up's..and that whole experience turned me off completely.  How can someone claim to be a serious company and take multiple days to answer an email from a potential investor?  So I'm glad to be here in this group.

@Jon Holdman, thanks, very good points, I certainly wouldn't think of all these, as my experience is next to nothing in this field.  Regarding the PM all off a sudden telling me good luck and refusing to manage my property, I'd imagine we'd have something in the contract about this exact situation.  There would have to be a warning period where I'd be given a certain number of days to find someone else, etc..I wouldn't think that a PM could up and go on a whim and leave me in the wind, but that point leads further to the reality that I'd need to get a lawyer to review all the contracts and agreements, because I would not be surprised if such an event would happen.

@Greg Cadwallader, thanks for pointing out the gotchas in this situation.  I happen to be one of those people who can walk into a casino and bet on red 10 times and have the roulette wheel land on black every time, only to hit red after I leave.  For this reason, I'm very careful about these things.

@Ryan D., I see what you mean..based on the bad taste in mouth from that lack of response from that one company I emailed, I'm already getting the feeling that some of these places are very quick at cashing your check but will take their sweet time in answering any emails or actually doing anything in case something comes up.

But the general knowledge that I got from everyone's replies is that don't judge a book by its cover, don't lump all turnkey management companies into one because everyone is different, and do your due diligence.  I have a lot of research to do, but thank you again for the valuable information.

I'll try to not be generic and over-generalize, but I keep seeing websites and offers for investing into turnkey managed properties who rent out the properties, where during the first year you're promised 10% to 15% ROI's. When I see this "first year" nonsense, it sounds to me like a ponzi scheme, but I want to know what happens after the first year..because no one in the right mind cares about how this starts, we care about how it finishes. So I'm looking for someone nice enough to tell me what happens after the first year, after the "everything is peaches" period, and preferably someone who invested with companies like this before and remained invested for more than a year.