All Forum Posts by: Alex SImon

Well, I suppose that someone has to be the first on the forum to do business with them, so I might as well be that guy.  I'll be sure to post reviews when I have some info.

Has anyone had any dealings with Ohio Cashflow LLC? I've seen that they have a bit of a presence here on the BiggerPockets forums, including some informational videos that they put up (Yellow Ladder Tip of the Day). I was wondering if anyone has done any business with them or purchased properties from them. The company seems relatively new, maybe a year old from what I can tell without really looking deeper, but I'm hoping that someone here knows whether or not they are good for doing business with.

I was planning to try and negotiate for cash back on closing to handle some of the rehab costs.  I do have a pretty high paying job that would let me handle the interest payments and some of the rehab also.  Not saying that I have every base covered (still a newbie) but I feel confident that I could plow on through any obstacle that presented itself, so long as I found a way to finance the property in the first place.

I think I might try to get a partner on board with this deal, someone with extra capital to take care of the purchase cost if I handle any rehab and the running of the property.  

Okay, this might be a tired old question but so far I haven't seen it covered in any detail (I might be totally overthinking the problem). A lot of people talk about using HML to get you into a deal that you might not have the capital to do on your own, and the idea is then to refinance the property to pay off the HML. But my question is, how do you know ahead of time if you're going to be able to refinance?

In this situation, I'm looking at the possibility of a small apartment complex, 24 units, should cash flow between 1-2k a month after the commercial mortgage and expenses. I plan to keep this as a long term rental property in my portfolio. However, I won't have enough capital for the down payment any time soon. The common solution to this type of problem seems to be "HML to buy the property, refi out after 6 months or so and then pay it down from there". But, being the newbie I am, I am questioning how to know if a bank will approve a refinance.

The property does not (on the surface, no inspection yet) need any serious rehab, mostly fresh paint and carpet here and there.

The property is almost fully rented and would generate positive cash flow from day one.

What other factors might play a part in whether I'm approved for refinancing?

What's the likelihood that a guy like me with good income and good credit would find himself unable to refinance this complex to pay off the HML?

There's risk and then there's risk. One of the things you learn very quickly when you're out here is to pay attention to the locals (i.e., other REI's who've been around longer than me). If they don't go somewhere, then don't go there. There could be a bomb or a gang of jerks dressed in black making a youtube video down that way. So when the first people to respond to every thread about turnkey properties tends to have something very negative to say about it, that pushes the idea further towards the "overturned oil drum conveniently in our path of travel" level of risk. Now that other people have started weighing in on the subject and it seems that there really is some possibility of finding reputable agents who will find you the right properties, the idea of turnkey properties is being pushed more toward the "guy in a dress who seems hell bent on kissing you so just go with it we really don't want to insult these guys" level of risk. Worst case scenario you get mono and an annoying nickname for a while.

I'm very glad though that so many people have weighed in on what was originally just a frustrated rant.  It's given me a bit more insight into how to best proceed, and I've reached out to a couple of people to start conversations about the topic and go into more detail.

@Nicole A. 

You brought up some good points and I'd like to just go point by point and address them one at a time:

First, I am quite completely stuck here. I am on a year-long contract with the option to renew each year, but the catch is that nobody ever leaves these positions and I don't technically even qualify for it to begin with (I knew a guy), so if I ever leave I am gone for good. No more contracting, no more payday. Gone and not coming back.  I get vacation time, but only a few weeks a year.  A couple weeks in the US isn't enough time to do all the shopping and comparisons and all the paperwork (and waiting for days or weeks for people to just do their jobs) and completely do a deal.

Do I have a GOOD property manager lined up?  Not as far as I can tell.  From everything that I've read, you only find out whether a management company is any good after using them to manage your properties.  It's my first deal.  So there's no practical experience to be had.  Repair guys?  No.  I'm working on that.  And even if I did have guys lined up, they probably wouldn't be in the same market as any place that I end up buying.

You say that I need to be there state-side to do my first deal, but I'm not coming home for good for another five years.  By then the market will have recovered significantly and I'll have missed out on the best period for buying real estate that I'll see in my lifetime.

So now we've come back to the basic option of "You're not cut out for this," where I'm being told to just give up, that there is nothing I can do but shovel my paycheck into a depreciating savings account or some pitiful returning mutual fund.

@James Wise

Actually it's more like 6,000 miles but basically the same thing.  This kind of falls into the third basic trope of the pattern though, "There are some good ones out there and Jay and Brie made a website."  Now, I really don't mean to disparage the efforts that Jay and Brie put into their website, because it honestly looks very well put together and I'm already signed up on it.  But the thing is, it's a month old.  It hasn't had any time to gain traction yet, and while I'm sure it will eventually become an invaluable resource, the vast majority of the companies on there have no reviews yet (barring a few suspiciously positive results).

Again we fall into the same pattern, the trap of no real actionable intel being gleaned from a turnkey thread.  We're like snakes swallowing our own tails here, just going endlessly in the same circle.  It's kind of freaky.

First of all, sorry if this comes off a bit negative.  I'm posting it in the off-topic forum because I don't rightly know which forum it belongs in.

Okay, so I've been doing some research into turnkey RE investing because I am stuck in the Middle East for the next few years and I need something that I can take a hands-off approach on. Now, I've been doing plenty of searching and reading lots of forum topics about Turnkey real estate providers and they all tend to go the same way:

"Can anyone give me advice on turnkey real estate providers?"

In reply, you usually see a few posts that sound like this:

"Sure! They're probably all scammers pitching you inflated rent numbers while downplaying the actual operating costs, and the properties themselves are probably garbage. There's nothing about a Turnkey company's services that you can't replicate with your own due diligence. And if you can't do your own due diligence, then maybe you shouldn't be investing in real estate."

For those of us who are stuck abroad, either in the military or contracting or otherwise unable to fly out on a whim, without any boots on the ground in great markets all over the country, there has to be a better answer besides "scammers everywhere!" and "you're not cut out for this!" The other bit of advice I keep seeing is to reach out to other investors in that area, but that comes right back to the "scammers everywhere!" issue and the other elephant in the room, that even if you luck out and connect with someone who isn't out to shank you between the ribs at the drop of a hat, you'll have to give up part of your deal and sacrifice half or more of your profits.

Has anyone ever had any real, actual, verified, positive dealings with turnkey companies?  Not just theoretical ones, but actually gone and bought a property from *any* turnkey company, or are we all just going in circles talking about how awful they must be and no one has actually tried it?  If nobody can make these work, how is there a market for them?

@Brie Schmidt I have a rather important question about how your site operates.  What is the criteria for a turnkey provider receiving Featured status?  Are these guys simply paying for a gold star, or are they earning it in some way?

I would avoid it like the plague while you're just starting out.  I'm only just starting, but I've done enough deals of other kinds with family and friends, and the golden rule there is that your friends will no longer be your friends after all is said and done.  Maybe later, once you've got your system and your team up and running and you can afford to take a hit in case a friend hangs you out to dry.  But on the first couple deals, I would steer clear.