All Forum Posts by: Ivana Ivanovic

 @Luke Bricca Yesss...my heart is really in renovating and giving houses a new life (did that with my own house pretty much) but alas I live in the Bay Area so there is nothing I can afford here....or anywhere nearby really... plus a small kid (so travel is hard), so hard to travel frequently and supervise a contractor, etc. 

Feels like I ought to find something in between in the right market - by that I mean a gem that doesn't need major structural repairs, and luck out on a contractor etc. 

@Luke Bricca good point that they are a seller in the end (and the beginning, heh). I think the idea behind turnkey should be that they are a proxy of me - the buyer - for a set amount of money - but alas that's clearly not the case.

Thanks for the Zillow endorsement - helps a lot! 

Cheers, 
Ivana

@JD Martin, brief and says it all. Gonna go listen to Show #243 now (the marketer in me loves that you put it in your signature!) 

@Brian Kloft I appreciate your reasoning here massively. I do believe in trusting your gut too - and my gut was screaming "no" to the salesy pressures from day one (texts and emails that we need to look at properties urgently, that two are already sold, etc.). Their style a massive turnoff in addition to everything else. 

And yeah, no good answers other than "magical sauce'. 

I do however to some extent want to double check my gut, and this is super helpful to make sure I am not paranoid.Thank you!

Thanks all for the responses. @Theresa Harris I know the balance re cash flow and appreciation, but they should not claim there'll be cash flow if there won't be any. The idea here is that you are paying them to find you the right kind of deal, in this case one with at least a minimum cash flow... 

Folks, I was talking to a turnkey company to buy an investment property, and looking at a few properties. Their pro forma sheet doesn't take into account ANY vacancy or repairs when calculating cash flow, and the rent comps are...ambitious. 

1. The way their cash flow calculations are presented is IMO sketchy: while the form is not a spreadsheet, it is made to look like vacancy/repairs are included in cash flow calcs (stacked together with other numbers impacting cash flow, and right above the final cash flow amount) 

2. When asked about vacancy/repairs, their answer is: that's why why they separately have $5,000-10,000 as "account reserves" in their pro forma. Or "simply cost of doing business", they keep repeating - (an unprofitable business, it seems to me, but maybe I am just inexperienced?). Furthermore, they add something along the lines of "this property is working for you, cash flow is here to cover this type of stuff while the property is appreciating -- so what if you have that 5K HVAC unit replacement " (FYI, even when optimistically calculated, cash flow does NOT cover a 5K HVAC unit within the first few years) 

3. When asked why their properties don't cash flow in any rental calculator, the answer is: "people who use these rental calculators don't get the kind of deals we give you" 

4, Re rent comps...I looked at Zillow, and another tool, and if I simply rely on Zillow, rents are typically lower and there are properties in the same few blocks on the market for 40+ days. THe turnkey company's answer: our property mgmt company is doing daily complex algorithms and they have the best information here. My reply: "but these properties realistically are for rent, so your comps should not be that much off, correct?" No reply, just that their PM knows best. P,S. PM has bad reviews for the most part 


Am I crazy here? Should I at least see NEUTRAL cash flow if I account for vacancy and repairs (and am optimistically counting on this to appreciate)?...Not to mention that all their ROI calcs depend on cash flow of course so long term return calculations also fall apart.

I do want to give them benefit of the doubt but I also want your smart opinions. Thank you very much! 

@Chris Grenzig and @Mitch Messer, I really appreciate your responses. This is what I suspected (even based on being a person living in a house myself!) but pro advice is really solid. I am working with a turnkey company so double checking their assumed numbers. Thanks again! 

Hi y'all. Just starting out here. Is this a low number for both vacancy and repairs? Looking at new builds (brand new or recent), vetted for major repairs (there will be none presumably, some have a builders' warranty), that I will potentially own for 10-ish years. 

Thanks!