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All Forum Posts by: Anton Ivanov

Anton Ivanov has started 13 posts and replied 290 times.

Post: New member from California looking to buy and hold for cashflow

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Jim Horne

Great goal, I wish you the best of luck!

My biggest piece of wisdom for you is to start taking action, however small, as soon as possible. It's easy to just keep reading or attending seminars without really doing anything with the information you learn. There are some members on here who I'm sure know most everything they need to buy their first rental, but have not taken that step.

Learn the basics and then start investing. You will learn more from purchasing and renting out your first property that you will from all of the books you can ever read, that I can guarantee you.

Post: 5 Ways Turnkey Companies Inflate Cash Flow Numbers

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Aaron Mazzrillo

I wouldn't necessarily call them lies because a lot of the assumptions are hard to quantify and difference investors like to use different numbers based on their preferences or experience. For example, I'm usually very conservative with my maintenance, so I may use 10-15% or gross rent for each house. Somebody else may look at that and say that's way too much and something like 8% is more realistic.

I do agree with you that most of the turnkey sellers have seen enough properties in their markets, so they know what numbers will be more accurate, but don't usually use them on their websites. 

Post: Anybody buy several SFR's simultaneously? Funding is too slow!

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Ben Phillips

I think it depends on your lender. I've recently been using a bank that is ok with financing 2-3 properties at the same time for conventional 30-year fixed loans. I'm not sure if they will be willing to go above that number. PM me if you want their contact info.

Post: 5 Ways Turnkey Companies Inflate Cash Flow Numbers

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Jay Hinrichs @Account Closed

As much as I respect your experience in the industry, I've personally found the 50% rule (or any other rough estimate methods) to be misleading. I would myself never buy a property based on these rules and don't think they are much useful beyond doing an extremely rough estimate or comparison.

I just see way too many people rely on them as their exclusive method of analyzing rental projections and end up purchasing poor properties because they didn't take the time to research and run the numbers with actual operating expenses that they will incur.

Post: 5 Ways Turnkey Companies Inflate Cash Flow Numbers

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Chris T.

I have turnkeys in Atlanta and Birmingham.

Well if you're buying property, then you're a real estate investor. I would say that most turnkey buyers are looking for cash flow, so many turnkey sellers probably feel the pressure to show properties with the highest cash flow possible.

Unfortunately, after a certain point the numbers just become unrealistic.

Post: Turnkey Out of State Investment

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Jonathan Scialpi

There are tons of forum and blog posts here that talk about turnkey investing, as well as some people who have purchased multiple turnkey properties in the past.

My biggest takeaway is not to treat turnkey investing different than any other real estate purchase. Meaning, you still need to research the market, the neighborhood, the property and the people you're going to work with.

Some may tell you that it's an easy and "sure way" to get a good rental in any market, but that's just not the case. There are plenty of bad turnkey properties and it's up to you to filter through them.

Post: 5 Ways Turnkey Companies Inflate Cash Flow Numbers

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

Hi BP,

I see tons of investors interested in turnkey properties lately, so I wanted to share my experience analyzing these deals after buying 4 in the last 12 months.

After looking at maybe 100 or so properties, I can tell you that the vast majority of turnkey providers inflate their cash flow projections. I wouldn't say that they are outright lying, but definitely making a lot of the deals seem better than what they are. 

Here are the top 5 things you should watch out for:

  1. Vacancy too low. I don't think 2-5% vacancy rates that I usually see are realistic, especially for B and C class areas where a lot of these properties are located. I use 10%+ for most of the properties I run numbers on.
  2. Small maintenance/cap-ex allotments. Once again, many turnkey properties are in lower quality neighborhoods, which attract lower quality tenants that do not take care of the units. Plus, many homes are old (some are just too old), so thinking your maintenance will be 2-5% is just naive (that's only $240-600 per year with $1,000 rent!). Cap-ex is usually omitted all-together.
  3. Using past year property tax values. In most counties, when you buy a property, it will get re-assessed at something close to your purchase price and your taxes will go up. Also, if there were any owner-occupied exceptions or discounts, they will disappear. Don't just look at the previous year tax value, use your purchase price and the tax rate to calculate what your actual taxes will be.
  4. Omitting vacancy the first year. Vacancy can happen any time. I had to evict one of my tenants 2 months after purchasing one the turnkeys. I don't see why you would not count vacancy in the first year, along with every single year afterwards.
  5. Inflated rental income increases. I see rental income increases as high as 5%/year on some turnkey websites. Again, unrealistic for most areas. There are cities that have had flat rents for years, or a 1-2% increase/year. If you have to depend on this increase to make the property cash flow, it's probably not a good deal.

The bottom line is you should always run your own numbers using whatever tool that works best for you. If they come out more or less the same as the turnkey company's website - that's great, you know that they are actually honest and realistic.

But if not, at least you will not be surprised or disappointed 10 years from now, like I've seen in some cases because you were realistic up-front.

Post: Analyze Rentals & Flips in Seconds With Our Mobile App

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

Hi BP,

If you're looking for a great real estate analysis tool for your phone or tablet and haven't tried DealCheck yet, this post is for you!

Over the last year, we've worked hard to build a simple, yet powerful real estate calculator for iOS and Android. We've received awesome response from our users and our app is now used by over 11,000 real estate investors and agents worldwide.

Here are some of the key features that make DealCheck unique:

- Analyze both rentals and flips on your phone and tablet in seconds. Your properties and settings are synced across all of your mobile devices.
- View in-depth investment analysis, including purchase breakdown, financing information, cash flow and profit projections, as well as all of the returns you may need: cap rate, COC, ROI, IRR and GRM.
- View holding projections for rental properties up to 35 years into the future and profit projections for flips based on varying lengths of the rehab project.
- Customize, export and email professional PDF reports with your personalized branding and contact information .
- Use the max offer calculator to perform reverse valuation analysis and determine your target asking price.
- Learn about real estate investing with the built-in real estate dictionary, complete with explanations and formulas.

You can download DealCheck free for your phone or tablet right here:

iOS: http://bit.ly/dealcheck-ios

Android: http://bit.ly/dealcheck-android

I'd love for you to check out our app and let me know what you think. The first 10 people who PM me will get a free upgrade to our Pro version!

Post: Inspection with or without pictures

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Edwin Ganir

I would definitely have him go back and take pictures. It's not just about seeing pictures of defects, it's seeing more pictures of the property. I assume you're buying these without looking at them yourself, so pictures is your only way to know what a house looks like, what it's built of, what it's layout is, etc. You may notice things from the pictures you would never know otherwise.

Post: Newbi trying to invest in Birmingham AL

Anton Ivanov
Posted
  • Rental Property Investor
  • Rio Rancho, NM
  • Posts 313
  • Votes 814

@Tommy Castillo

Let me know if you're interested in buying turnkeys there. I bought 3 SFRs this way in Birmingham last year and pretty happy with the people I worked with!