All Forum Posts by: Chris Lin

@David B. Glad you have had success and continue to do well with your portfolio

@Chris Lin  Sorry to hear about your place, hoping you get resolution to your issues.

I bought two places with REI in 2024, one in Huntsville and one in Little Rock. The process of buying, getting a loan and settling to closing was extremely smooth. They also have blanket insurance coverage which is much lower then policies in Philadelphia. Part of the allure was the holding fees (insurance / property were several thousand less then up north)

After one year, my Huntsville tenant had to move out early for a job relocation. They ended their lease early. REI has processes in place so portion of the Security Deposit/ missing rent had to be covered by tenant. Even with that, I had vacancy for 3 months, turnover expenses (rekeying, deep cleaning, etc), paying the one month lease to find a new tenant and also the new tenants are in at a lower rental rate then the prior tenants. (1500 to 1350)

My Little Rock tenant has been paying but already slightly behind. I'll have to reach out to my advisor to get an further update. Was told initially it was a banking issue, but we will see what the latest is . I have been getting updates / communcation on my properties, but also after one year I'm on my third service advisor due to internal org changes. 

My conclusion is that take the provided ROI calculations from REI as purely estimates. Having a problem tenant and dealing with eviction could happen in any market. Know the reason why you are investing. I knew for me this wasn't going to have instant cashflow especially when buying a turnkey and in 2024. Longterm I believe this will work out, but also can't provide a full picture after only holding for one year.

@Chris Lin,

Thank you very much for spending time with me on the phone last night.  I have shared your kind words with our team and appreciate your willingness to share.  We have also addressed where we fell short and failed to follow through.  Again, as you asked, no one is in trouble, but we have high expectations for our team, and there are indeed steps we can take to improve.

I'd like to recap for readers, and please let me know if there is anything stated incorrectly here.

We primarily failed to be proactive on the front end once we knew the resident used the legal system to their advantage.  It should have been communicated that we had a plan to assist you and would waive the new resident lease fee.  Not because we had failed - this was a four-year resident entering their fifth year on the property when they got into financial trouble.  But, we recognize that the experience you were having, multiple months without revenue and no clear time frame to be fixed, is not a typical experience with our company, and when and where we can help, we will.

Our team didn't follow up as we said we would, so you asked us for updates instead of how we plan to operate, which is updating you proactively.  That should never happen.

We also discussed the option of selling your property or even transferring management.  Our contract states that we charge the entire contract, including unpaid fees.  That is in the contract as a deterrent to prevent an owner from using our services to find a high-quality resident and then moving the management, thereby hurting our reputation with the residential community.  I can think of one instance where this was applied.  

In your case, we work for you.  We have worked together for 5 years, and two of your four properties, purchased I believe in 2022, have both renewed their leases and are operating smoothly.  If, for any reason, you needed to move your properties or looked to sell, we would be happy to waive that clause.  

We discussed a few more items last night and I will make sure we follow through for you on those.

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Again, I appreciate the opportunity to speak.  If you had not shared your post, as an owner, I would not be aware of the issues you are experiencing.  We are not perfect, and we only know where we fail when we are told.  I also appreciate that you share this on BP.  I never shy away from accountability.  We work hard and know our reputation is everything and a little transparency never hurts any company!  

You now have my direct number, so please don't hesitate to reach out if I can do anything for you.  

best -  

 FYI Dominic, the resident had been in the property since early 2019 and ran into issues in 2024.  They hired an attorney who was skilled at assisting them stay as long as possible.  Unfortunate.  

It doesn't sound all that bad to be honest 

Property manager fees sound similar - for reference mine is 1st months rent plus 10% of gross income per month. If there is a late fee, the property manger pockets 10%, I would get the remaining 90%. 

The 15% repair management fee is a little ridiculous - part of the property managers job is to manage repairs. That's literally a big part of their job. Charging an additional 15% seems a little ridiculous. It should have some sort of a cap - surely they aren't taking 15% of a roof repair or expensive plumbing repair...

The management fee of 10% during selling is also ridiculous - are they taking a commission when the property sells? I don't understand - what are they taking 10% of? There's no income, so that should be $0. Are they showing the house? Making appointments? That's what the commission is for...

It does seem like their communication is top notch - I've spoken to a few people from REI and they seem to have a decent business model. Everyone was nice, they have great research on their management areas and good statistics to back up their management (although I find their statistics are overly optimistic, they are still real numbers)

There just wasn't enough meat on the bone for me to go that route. And they take a cut along the entire way - they sell you the house that they have rehabbed and are selling at appraisal value - (making commission plus flipping profits), they lease the house for you (take a management fee), they repair (take a %), when you sell (there they are taking another percentage). I have to think the stock market would beat this type of investment from a investors point of view. 

One of the big ways you make $ in RE is when you buy - the equity capture when you buy a good deal. That is completely eliminated with REI.

@Chris Lin

If you were to include Equity growth (from appreciation and mortgage pay-down) what sort of returns would you have?  I would bet they are decent. I think the whole point of holding a leveraged  good quality turnkey from a first-class team like Premier Properties/ REINation is to have your costs covered while your equity grows through a market cycle.  I think if you used leverage than this is what you should expect.  I have 3 houses that Premier has managed over almost  9 years, and they do a great job keeping them rented to very long term tenants.

Wow Chris this sounds like one hell of a situation. You’d like to think you get what you pay for; however on this instance you seem to be over paying for hands off passive real estate.

If passive real estate is truly what you are searching for, have you considered 1031 exchanging into a DST (Delaware Statutory Trusts) or other rules of syndications? Note you must be an accredited investor to participate.

A con that turn some people off DSTs is they come with higher fees than out right owning a stable, low maintenance property; however based off what you described DST fees are far below what you are currently paying.

There are a few threads about DSTs on this platform, or I would be happy to give you an overview if you told like. DM or email me anytime. 

Good luck 

@Chris Lin, I appreciate your candor and sharing your experience here at BP.  I sent you a direct message, and I'd like to connect and speak directly with you before responding to your post.  I have reviewed our Salesforce communication and the data from your portfolio, which only tells part of the story of your experience. I want to get more of your perspective before responding.  Hopefully, you can answer, and we will connect soon.

Best - Chris

the fees charge are basically exactly the same you will pay with any other PM for those asset class's . And communications from REI is far above the industry average that I can tell you.

SFR rentals are not a get rich quick or cash flow to live off of. They are for long term wealth building and the goal has to be to get them Paid off as quickly as possible you then will start to see real cash flow.. a stable of max leverage rentals anywhere is not going to move the needle on income to you in the first five years.