All Forum Posts by: Keith Anderson

Originally posted by @Joseph McCrillis:

@Keith Anderson -How is your rootstock acquired home performing 3 years later?

@Linda Dalton I'm about to buy out of state.

@Jason G. -What's your opinion 5 months in?

I actually never ended up closing on the home, which was in Boca Raton, FL. 

Roofstock initially advertised the property as not requiring flood insurance, but the lender required it. Turns out the actuaries were ahead of the curve on assessing the impacts of climate change, and the flood insurance was so high that the property would never have cash flowed as a rental.

For a year or two after I passed on it, I did check on that property to see what came of it. It changed hands within a year or 18 months of being sold by Roofstock for a nice capital gain, so had that been my strategy, perhaps I could have done OK. But as a buy-and-hold investor, I think I dodged a bullet.

My experience with Roofstock was pretty good overall, but I ultimately never acquired any properties through them. 

Edit: disregard. Tried to delete, but there seems not to be an option.

Originally posted by @Ryan Fortier:

@Keith Anderson My Uncle has been an agent and investor for 20+ years in Portland. I can send you his contact information if you'd like.

Ryan, please do message me privately.

We're exploring single family and small multi-family properties in the Portland, Maine area for investment as rental properties.

Can anyone recommend an investor-friendly buyer's agent in the area? We actually see a property we're curious about, but we're based in Cambridge, MA (and can't travel for the next few weeks), so were hoping to get some eyes on the property to see whether it makes sense to make an offer.

Wayne Brooks Appreciate the feedback, and agree -- the cap rates are not the main draw. I didn't think it was in a flood zone, but it's looking like it is. Will connect with Bob Peppe.

@Justin Jocewicz @Glenn Kopensky @Wayne Brooks

Just found this thread after searching for "Florida insurance."

I'm under contract for a rental property in Boca Raton, FL. It's a 3 bed, 2 bath, single-family home with about 1,700 square feet of livable space. Like most homes there, it's about 45 years old, masonry construction, etc. It's in good condition.

Anyway, I just got a quote from a local insurer, and the quote (which also includes a flood policy), and it's $3k+ annually -- about 2.5x what I had modeled based on what I thought was good local data.

Does anybody happen to have:

• Insight into adequate coverage in a flood / hurricane zone like this?
• Recommendations or references for insurers that specialize in insuring investment properties in the area?
• Other thoughts?

I think I can make the deal economics work, but insurance at 2.5x what I planned is a pretty big dent in my cash flow.

For those routinely pulling their initial investments out to fund acquisition of more property, what level of leverage are you comfortable with? What kind of reserves do you hold for vacancy, repairs, and CapEx? What's the exit strategy? Acquire a large portfolio quickly with cash-out refinancing, then eventually tap the brakes on growth and let tenants pay down the debt over 25-30 years? Sell properties when RoE gets too low? There seems to be a lot written on this strategy from the standpoint of someone in full growth/acquisition mode, but I haven't seen much scenario planning over a timescale of 10, 20, or 30 years.

I'm under contract on a property with Roofstock and have previously purchased from a turnkey provider in the Chicago area.

It's important to note that Roofstock is a marketplace for certified, off-MLS properties with certified tenants in place. This means that Roofstock does diligence on the properties and tenants (all of which is available to you as an investor) and connects you to vetted property managers. They also have preferred relationships with lenders.

Unlike the firms more commonly referred to as "turnkey" operators, however, Roofstock does not renovate properties before sale, nor do they run in-house property management.

The upsides seem to be that:

• Their marketplace lets you search, filter, and analyze many properties across the Roofstock markets more efficiently than any single turnkey operator or marketer does
• Their properties do not carry the typical turnkey markups, which may leave a bit more meat on the bone (these tend to be rental properties owned by institutional investors)
• The provide much more complete and useful data in their proformas, with the ability to easily tweak assumptions

The downsides seem to be that:

• Properties are provided as-is and likely haven't had a complete renovation, so repairs and CapEx may be higher with their properties (though they do disclose details and expected useful life on big ticket items like the roof and key mechanicals)
• You lose the "one neck to choke" benefit of turnkeys, though they do assign advisors who are available to assist you throughout the process of closing on the home

If you are familiar with Homeunion, Investability, or Mashvisor, they are all worth a look for comparison. 

I find Roofstock's business model and fee structure to be clearer and more investor-friendly than close-ish counterparts Homeunion.

I haven't looked closely at Investability. 

Mashvisor is an interesting research tool but not as powerful for largely hands-off property acquisition and management.

None of this represents an endorsement of any particular service; I'm just sharing my observations and opinions.

Originally posted by @Abhayjit Singh:

@Keith Anderson

Thanks for your reply - that's very helpful to hear!

I am certainly open to investing around the country if that's where more turnkey opportunities exist. How did you get connected with the turnkey operator in Chicago, and overall how much work has it been to manage the properties remotely? Were there any significant legal hassles?

I'll take a look at those blogs and try to get a better sense of things locally as well.

Thanks!

Before selecting a partner, I did extensive research and diligence on markets and turnkey operators, with pretty strict criteria for both. I toured the neighborhoods with the operator and independently, spoke to current and past clients, and did a lot of desk research using both free and paid data sources. Some of the detail on this approach is available in my post history.

There's very little work involved on my part -- these are turnkey properties. There was a fair amount of uncertainty for a while, however, as communication with the PM was an issue. No legal hassles at all.

Note that I am not endorsing any given provider or suggesting that my approach is successful or right for you. I only started investing a year ago and don't expect to have any sense for true results for at least another 2-3 years, possibly longer.

Abhayjit Singh I'm based in Boston and started investing a year ago after about a year and a half of research. I bought two properties from a turnkey operator in Chicago last year and am under contract on a 3rd property in FL. There are no "turnkey" providers locally -- that is, firms providing recently renovated properties with a tenant already in place and ongoing property management. The market just doesn't lend itself to that model. Locally, I find most investors are house hacking (living in one unit of a multi-family) flipping single family homes or doing condo conversions, or doing buy and hold investing within a 2-3 hour drive in areas like RI, CT, and VT. Check out the blogs of @Justin Silverio or Shaun Reilly to get a sense for what some of the active, local investors are doing, and consider attending some of the local REIA meetings. I'm still actively searching for local deals, but the competition is more intense and the capital requirements are higher. And if you plan to buy locally, you may have to define success a little differently than the cookie-cutter cash flow mantra you hear on BP.