All Forum Posts by: Kevin Collins

@Kevin Harrison I can speak to my experience. I started my first post which created this thread and bought my first property with REI several years ago. I can say my personal experience has been pretty mediocre. I bought 8 properties through REI and then bought one on my own in an area REI manages (so 9 total that REI property manages). The first year is typically good for most properties, although I've had some rough starts. Last year, on my 9 properties I had negative cash flow after accounting for mortgage payments, etc. One of those I bought on my own, but even with the other 8 I was still close to negative cash flow and they were all properties I bought for cash flow. The property management has been hit or miss. I've had a lot of large repairs in the past year that just kill the cash flow. I've also had a couple evictions/ask to vacate on properties where the tenants were constantly behind in paying. When you add up legal fees, lease fees, loss of rent, etc. it can add up. My original plan was to buy 15-20 properties with REI if things went well. I bought the 9 properties within the first 2 years, but haven't bought one since. The customer service/property management hasn't been as proactive as I thought it would be. They are paying for some repairs now after I've had several issues and a brand new tenant moved out, but I'm still paying a mortgage without any rent coming in during those months.

@Jeff Adolphe it can definitely take a few months. I understand that can be frustrating at the beginning but I can tell you the wait is worth it in my opinion. It also depends on what your criteria are. The higher the cash ROI the longer the wait because there are fewer of those and you're likely competing against a large pool of investors like me. I believe REI is continuing to invest more to expand and have more homes available. I will say sometimes I go months with nothing and then all of a sudden I'll have 2 homes that meet my criteria offered in the same month. It really depends on their availability which seems to come in waves. Hope that helps.

@Elaine Bell I went through the interview process with a whole bunch of themes. I'm a relatively tough critic, but I'd say REI was the only one I felt had put the effort into giving realistic numbers and owned the entire process. Some of the other top "turnkey" companies on here didn't even own the company that did the renovation, nor do they own the property management company. There are way too many variables that are out of their control in that scenario.

We’ve now invested in about 4 states.  I’m happy to give you more of my experience with the other turnkey companies if you message me.

@Justin Whitfield no problem.  The average price I look for is typically in the $150-180k range but that’s just my personal preference.

Hi @David Boley - I can give an update since my first house. I'm now coming up on about a year with REI and just today closed on my 7th house with them. I also bought a house on my own in one of their areas that they manage, so in total they manage 8 properties for me. Overall, all the houses are performing as expected in the first year. It is as hands off as you can get with rental properties. You get your own dedicated customer service agent and she handles anything I need in a very fast response time.

I have run into a couple issues in the buying/rehab process, but I will say REI has rectified the situation to my satisfaction every time and without major pushback. If I'm reasonable....they are reasonable.

I vetted out a lot of the other turnkey property companies on Bigger Pockets before deciding to go with REI and I feel extremely confident REI is the best. I'm a very happy customer of REI so far.

Thanks @Chris Clothier.  I can't convey our conversation much better than you already have.  From my experience, I really appreciate the fact that Chris picked up the phone and called me.  I was able to give him my perspective and I got to hear his.  I think we both ended up in a much better place.  I will say Chris comes across about as fair and customer oriented as anyone I've ever dealt with in real estate.  He genuinely listens and wants to partner.  I'm going to continue buying from them and will update from time to time on how it goes (I expect it to go well after chatting with Chris).

@Ricardo R. yea I think the problem is you just assume your point of view is correct any other point of view is wrong.  That’s why you say condescending things like “it may be painful for you to hear” or “ I’m sorry for being blunt”.

Anyways you have flip flopped on your point of view which is confusing hence my disagreement.  You said in your last post you agree there is an obvious advantage to having a realtor over buying from a turnkey provider. However earlier your previous post you said “nothing will change when you go work with a realtor yourself”.  Obviously those are conflicting statements and confusing.  No need to clarify them at this point. I just find them confusing and not helpful to my original post.

@Ricardo R. you definitely come off condescending for sure.  I think we just disagree.  There is an obvious advantage to buying on your own vs buying straight from a turnkey if the properties are overvalued.

@Ricardo R.you made the assumption I haven't done my homework and don't understand how turnkey works. I definitely have. My feedback is specific to REI vs what they marketed to me thus far (as I said 1st property with them). Of course you pay a premium with a turnkey company. How much is too much though? As you said 9% is not a hard number to achieve. From the REI sample that seemed to be the case, but thus far it seems that that is actually a pretty rare return to get from them (hence my feedback). Second since there is "no free lunch" how much is too much? Numbers are based on a price paid for the property. If the property doesn't appraise you are then overpaying for the property in exchange for a turnkey experience.

From my experience so far it looks like the benefit of turnkey from REI is purely on the property management side (also tbd as they've yet to manage it). If I'm paying above market for a property then the better return would be if I just work with a realtor to buy properties on my own in these neighborhoods and turn the management over to REI. Then an appraisal works to my benefit and the quality of the property would be very close (as I said the property I purchased had relatively cosmetic renovations such as painted cabinets). I'm just weighing the alternatives.

I'm a more seasoned investor so I won't just write off the appraisal. It's more cash out of pocket so it lowers the ROI. Also the comps they provided were pretty realistic so I didn't even fight it. On past appraisals in my investments I've fought the appraisal and won. This one seemed pretty reasonable. With that being said, the appraisal isn't my main concern. It's the fact that such a small amount of properties meet the numbers that were prevalent in the sample. Then the 1 that did meet the criteria didn't appraise. My acknowledgement of investors seeming happy was based on internet discovery. That isn't always an accurate representation.