All Forum Posts by: Johannes Schunter

The provider for this was http://roiturnkeyproperties.com, and there I interacted with Doyle White and Jared Garfield. But I blame the Real Wealth Network as well, as they are the broker who boast that they only work with selected (and thoroughly vetted) turnkey providers whose operations on site they have inspected. Their vetting process can only be called a joke, given the poor nature of this turnkey provider. And RWN's insistance by their advisor Aristotle that no capex reserve is needed for the first 5 years is completely unprofessional.

Unfortunatley, to top it off, the inspector I hired seems to have been a joke as well, as he entirely missed the old fridge and the mold issues under the house. Lessons learned: Don't buy out-of-state without seeing the property yourself (no matter what online due dilligence you think you can do), and don't listen to shiny and supposedly reputable podcast celebrities like Kathy Fettke.

I purchased a $85k turnkey in Huntsville, AL, via the RealWealthNetwork in 2017 and it turned out to be an utter disaster. In the first year after purchasing from the provider RWN connected me with, I incurred $15k in repair costs from issues that were not obvious at inspection (mold, plumbing, HVAC replacement, etc.). Among other things, it turned out the fully "re-habed" house had a 17 year old fridge in it, and they claimed in the phone call no capex was necessary for the first 5 years. It was my worst investment ever, and I encourage everyone to stay far away from these scam artists.

Hi landlords, I need your wisdom! I own one half of a duplex condo building  (quite common in Connecticut), I moved out of my unit a year ago and now rent it out for nice Cashflow. So does the owner of the neighbor unit. We both manage our own units, and just pay a master condo insurance for all exteriors/yard/fence together. Our insurance provider just informed us that they will not extend our joint master condo insurance next year, because they don’t insure condo buildings where more than 50% of units are rented out and not owner-occupied (I don’t know why that is an issue for them). We both don’t plan to move back in anytime soon, and are weary that we might have to sell if we don’t find a solution. Do you know of any insurance providers that would still insure our building even if it’s fully rented?

Hi all! Very interested in this thread. I'm a not a US citizen, and if I one day leave the US, the income of my US rental (which I hold in my name) will be taxed at a withholding rate of 30%. Not pleasant. Transferring the deed to a US-based LLC is not an option for me, because I don't like the risk of the Due On Sale clause being called for my mortgage (it happened to others).

I have, however, an LLC in the same state. Can I legally and practically avoid the 30% withholding tax if I rent the unit to my LLC for a few bucks (so I don't have much personal income to report), and let the LLC sublet the unit to the tenants, on which the LLC will then pay taxes at the corporate tax rate?

@Dean H., Two reason: Diversification and increases wealth creation through leverage. But you are right, if I only hold two properties I also only need two capex reserves. I have to take another look at my numbers again.

@Matt R., so you would recommend doing strictly buy & hold instead?

Hi @Account Closed, what is MACRS 200% DB? Do you have a link where I can learn more about your approach?

Thanks all for the useful input! 

@Ali Boone, the $100/door is what I come out with after discounting 5% vacacy, 10% for maintenance and repairs $150 for capex, which I hope is a failry conservative estimate. At the end of the day I hope I end up with more than that, but for my calculations, I prefer to err on the conservative side.

@Larry Fried, good point re the limited amount of mortagges. I indeed plan to have some mortgages under my name, and some under my wife's name, so I hope we'll be good with conventional financing for our first 10 properties.

Hi all! I am new here and so far learning a lot! After a profitable sale of my primary home (pure luck, bought a NYC condo in 2011 and prices went up crazy since then) I am now trying to come up with my own 10-year plan to invest in real estate more strategically. Here's the plan, and I would love your feedback on it:

I have $200,000 in cash and I want to buy eight $100,000 turnkey SFHs with a 80% mortgage and $4000 closing cost on each. Each property will already have a tenant and will cash flow at around 6% with min. $100 net cash flow per door (after mortgage, tax and insurance, I'm calculating 5% for vacancy, 10% for maintenance and repairs and a flat amount of $150 for capex reserves per house). This will mean a monthly cash-flow for me of $800 for my eight houses.

Now here is my question: Since the turnkey properties are newly rehabbed with all big ticket items (old roof, old water heater, etc.) taken care of for a while, one could argue that I will have only very few capital expenditures during the first few years, and will only need the capex reserve IF I hold the property long-term (say 7+ years). Would it be then a viable strategy to plan on selling each property after 5 years (assuming that the selling closing costs of $7000 might be covered by a minimal annual appreciation of 1-2%), exchanging them for new turnkey properties, and in turn reduce my capex reserve for each of my houses from $150 to just $50 per month, since I don't have to budget for these long-term expenses? This approach would increase my net cash flow to $200 per house, to a total of $1600 for my eight houses.

Do any of you invest in turnkey properties this way, and do you think this approach works? Or have I missed something in this theoretical model? Thanks much in advance for your advice!

(Please note that this is not a discussion about whether turnkeys are in general a good choice or not, for various reasons I've made the decision that out-of-state turnkey is the best strategy for me personally).