All Forum Posts by: Ann Howell

@Doug Johnson and I have both moved our properties to Decas Group.  We are very pleased so far.

If you have a property managed by Arbor Trace, I encourage you to confirm that the property actually has a tenant in it.  We had a signed lease that was actually fraudulent.  The property was vacant and not being maintained.  We have since found a new PM who has been fabulous in helping us secure the property and move forward.  We are considering our options and would be happy to talk with other clients.

Does anyone here have a house managed by Arbor Trace in Birmingham?  Or have you bought a house from Birmingham Income Properties?  Their property management business seems to be falling apart due to conflict between partners.  We are out-of-state owners and trying to figure out what is happening.

Congrats!  It seemed like a great opportunity.

 Hi Marco

I will answer your question as a turnkey investor.  When taking the risk of investing out of state in turnkey properties, I look for 9-13% cap rates. However, I don't assume that the numbers going in to the advertised cap rate are accurate.  We break the numbers down into the components and evaluate each number and recalculate our own cap rate. Our biggest goal is to get reasonable cash flow on any turnkey property.

I just talked to Michael in your company about Turnkeys in Brimingham and Houston.  In Birmingham I would expect 11-13%.  The market in Houston is different. We would be investing here to have properties near home and I would look for 7-8% cap rate. I believe Birmingham would cash flow.  I am less confident about Houston, since we are just starting to look at those numbers.

Great article!  I was blown away by your statistic that the FMNA guidelines had been changed 968 times in the last six months.  No wonder the banks like to put their own overlays on the requirements, so they can control the situation.  But it does make it hard for investors to find the financial solutions we need.

Hi - I am pleased to see a Houston thread. My husband and I want to start networking with other REI in town. As for the school comment, you need to be very careful choosing schools. They can differ greatly within an area and within a district. I recommend using a site like greatschools.net to look at ratings, visit the schools and talk to parents if possible. For example, in our district, Spring Branch, there are two excellent high schools and two terrible ones.

Hi Lenna

My husband and I are also in Houston and getting started.  Right now we are looking out-of-state, but we are interested in investing in Houston as well.  I'd be happy to stay in touch.

Turnkey properties will cost more than buying a distressed property in an off-market deal.  However, you get the convenience of having the rehab complete and a tenant in place.  Your strategy determine what makes the most sense for you.

In any case, the numbers still need to work.  You want it to cash flow in a sustainable way. You also won't be able to get financing if the appraised value is way below the purchase price. 

Congratulations!  That is an exciting step. 

We are working on a turnkey purchase in Birmingham that is not going nearly that well.