All Forum Posts by: Brian Naumann

Here is the real question to ask,

Do they stand behind their providers? Meaning, when you buy a home, do they guarantee that the provider/PM is legit? Or do they collect their marketing fee and move on, leaving you to fend for yourself?

Crazy people arent always the most logical but why can't they file a change of address for their mail at the post office or online? Takes less than 10 min online to do. I don't think you can do this for them, but you could email them the link.

Then there is no legal reason for them to be on the property. 

Thanks @tim pagano I hadn't considered this. Also thanks for the opinion on firing the PM. Thats what I was asking in this thread not opening a discussion on price (which I never mentioned the property price) of TK properties as this thread has been has been overrun with.

@Joel Owens I met my mentor after I had my property under contract.  My mentor walked me thru 4 of his properties that he had just acquired and were being rehabbed. He talked me through  how he would rehab each property and the process he had for renting the property. If I had met him before I had this property under contract I probably would have done this  locally first.

@Jay Hinrichs I am working with my mentor to begin acquiring local properties, I will be following his BRRR methods and be crushing it like him soon.

 I started in Memphis wanting a TK to start with to get my feet wet.  

@Curt Davis good to know! Thanks

@John Thedford @Duane Kidman checked out both companies before I even considered the deal, both companies were rated A or A+ on the BBB. I also did online reviews of the TK provider (which is separate from the PM / Rehabber). I used many review sites including @Jay Hinrichs turnkey review. I did every type of due diligence I could to ensure I made sure I knew everything about the providers, neighborhood, crime, and insurance quotes from 5 different agents. @Alex Craig  Everything about the area where the house is just like the neighborhood I live in as far as crime and demographics we are considered a B-C neighborhood. Are you saying its less than a C class neighborhood?  

The provider has been super attentive and has responded promptly to my concerns. They have also acted as an intermediary when I wasn't getting answers from the PM.

@Jay Hinrichs not all of have the millions of dollars to buy high end homes. Some of us plan on buying smaller properties, let our tenants pay down the mortgage then 1031 exchange into bigger multi-family properties.  I get tired of seeing you bashing people because they didn't buy $150k properties, assuming that you can't make money on these properties. I have a local mentor that is up to 20+ properties and they are anywhere from $40k -$60k and he is killing it! I saw the numbers and I couldn't believe how well he was doing, that's why he is my local mentor.

Hi Everyone,

I closed on my first TK property in Memphis, TN on August 17th. Yay me! 

Found out during the rehab's home inspection that there were (inherited) tenants in the property during the rehab, I thought this was a good thing until I asked what their rental terms were and got no clear response from my rehabber/PM.

September 10th rolls around and its time to get PAID!!! The PM says they did a lease renewal on Sept. 7th and the tenant would be paying on the 20th. I asked, are they paying Sept rent on the 20th or Sept. and Oct rent? No response. Sept 20th comes and goes and I get a message that the tenant did not pay and the PM wants to know if I want to file a FED! Yes, I do. I am not running a charitable housing establishment.

So lets review; I've collected $0 in rent. The tenant has already gotten at least 2+ months free rent, by the time I get them out it will likely add another month. I get to pay to evict. I also get to pay 2 months PITI out of pocket! Glad I had reserve funds set aside. To add insult to injury, I also received notice that the property in un-insurable. I've talked to some trusted advisors and they said this can happen when the insurance company inspects during the rehab process and can be easily resolved. I know I'm freaking out.

So is this just bad luck or should I be firing my PM after the eviction?

Thoughts and opinions welcome.

Thanks

Brian

@Michael Seeker Thank you for your reply! I appreciate sharing how you do it. However, doesn't ACV depreciate with the age of the property? I worry about a kitchen fire that burns a portion of the house but not enough for a total loss. Then having to deal with the claims adjuster reducing the cost of walls, roof, etc due to depreciation (think they also call it pro-rated) to a point where it is not economically viable to repair the building. In your example, yes if the place burned to the ground I would be fine with payoff and equity and walk away for the next property. But from what I read/heard (can't remember where) that only happens 10-20% of the time.

As far as the liability, I would only have this asset held in an LLC. So if someone sued they could only get this property (or technically its equity), if I understand how this works correctly. Obviously, I don't want to lose any property so I would want to make sure I have enough to keep everything safe and after I add a second property I would add an umbrella policy.

Hi all,

Started looking into insurance for my first rental property. 

How much property/liability coverage should I be looking for for a 50k (estimated) SFH. I'm guessing that I would want replacement cost vs actual cost and liability around 500k?

I'm scheduled to talk to an agent next week and don't want to go in blind.