All Forum Posts by: Lara Chinarro

Thanks everyone for your inputs. It is great to have this community to reach out to when we have questions. We will update when a tenant is in place and discuss the full process.

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@Caleb Heimsoth,

Thanks for your response. The turnover included cleaning and extermination (it seems there were flies). No paint, no flooring. This is why I think it took way over a reasonable time.

Sadly, we are far from finding a new tenant. The property has just been listed a few hours ago. No tenant on sight, since it has not been advertised or marketed in any way. On Zillow, yesterday it was listed as "not available". Let's see how long it takes to find a tenant now!

Lara

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Hello,

Last year we bought our first investment property with Smartland based out of Cleveland Ohio. The purchase process was a good-responsive sales team and all fixes we requested after home inspection were addressed. They immediately placed a good tenant in the property and we had a strong performing asset for 12 months. Fast forward to Aug of 19' the tenant needs to leave the unit and this is where the problems start:

Sept 4th: We reached out for an update and are told it was a high turnover month but we would see a move-out report soon.

Sept 11th: We receive the move-out report- some works need to be done (including extermination) but this unit seems to be in relatively good shape.

Sept 21st: I reach out for an update and am told final cleaning is finishing up and property should be marketed shortly.

Sept 24th: I'm told it should be ready by the end of the week.

Sept 27th: follow-up from "Investor Relations" almost cleaned property to be listed ASAP.

Sept 30th I send an email and am told "the last thing we want to do is list a property before it is ready..." we agree, but why is this taking so long? As of Oct 2nd the property still does not appear to be on the market.

So, looking for feedback from the community--is this what to expect with turnkey solutions? I get that it may take a couple of months to get the apartment rented but I sense a lack of urgency to get the unit listed. Looking at Smartland's website it looks like they are moving to larger projects/different types of investments. Is it time to move on to another mgmt team?

We’ll keep this thread going to document our experience moving trough the leasing experience

Thanks!

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Hello!

I am looking for a GC to get a couple of SFRs rent ready in the Cleveland area. Do you have any recommendations? It is my first one in Cleveland, but I am looking to invest more in the area, so I am looking for someone who is in for the long haul.

Thanks!

Lara

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Thanks @Mark Fries! I will see if this is the kind that lasts such a long time!

and @Bob Okenwa, thanks also for the specific details!

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Hi BP!

I am in the process of buying my first property and we have a 12 year old water heater. The inspector recommends replacing it, but the contractor says it should go on for a long time.

My question is: how long does a water heater usually last? My limited knowledge tells me it should be around 10 years. However, I have seen that the IRS places it in the 27,5 years category, but this seems absurd to me... Any insights?

Thanks so much!

Lara

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Originally posted by @Ivan Barratt:

@Mike D'Arrigo There are great TK companies in existence; perhaps 1 out of 100.

The problem is the model. It falls apart from a return perspective over 3 to 5 years (and then on...) due to costs of turnover/make ready. If the investor is ok with 0% or negative cash flow and only looking to build equity over time by paying down the mortgage then by all means move forward. When you're old and gray you might be rich.

Oh wait... but aren't investors like @Lara Chinarro going out of state to find deals that "cash flow."

Bottom line: TK investing is a BS investment 99% of the time even when the TK provider is good!

I am sure there are plenty of ways to make a better return of my money. However, being a newbie with 0 time and living in an expensive area, this seems like a better way to use my money than sticking it in the bank. At least with the TK I might be rich when I am old. They way I have it now, I will never be rich.

Also, now we have our W2 jobs, so we do not need the additional income. We will when we no longer are working. We are thinking about this as a long-term strategy.

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Originally posted by @Shawn Ackerman:

@Lara Chinarro congrats on getting the ball rolling with your REI career. I'd suggest doing some research on markets that offer what you are looking for. Additionally I would also suggest you identify your metrics i.e. cash flow/appreciation/class of property/landlord tenant laws in the respective state and any other metric that propels you toward a specific goal. Lastly, be sure to do your due diligence on any provide working in the market that interests you. There are no two providers alike and not all "turnkey" companies are made equally. All the best to you. Always remember to persist and you will WIN!!!

Thank you! I am very excited to be here!

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Originally posted by @Mike D'Arrigo:

Originally posted by @Lara Chinarro:

Originally posted by @Jay Hinrichs:

About buying from the LMS, is it possible to just find house, have it inspected, buy it, find a PM and go? And save money in the process? No need for the TK provider? I understood the TK renovations were "cheaper" than the ones I would find on a flip. But if it is not the case, this opens a bunch of different possibilities!

Lara, it's very rare that you can find something on the MLS that doesn't need renovation and still have equity left in it. Most anything on the MLS is being sold at full market value. Personally, I think you can be better off with a turn key property than one off the MLS as long as you are dealing with a reputable turn key company and here's why.

1. It's a fallacy that you pay more for a turn key property than one off the MLS. True, some turn key companies put big mark ups on their properties and price above market value but those are the ones that require cash purchases or don't allow finance contingencies. Stay away from those. When a turn key company sells to a financed buyer, an appraisal is done. If it doesn't appraise, the buyer can cancel.

2. Turn key companies have significant cost advantages where they don't have to sell above market value. They are buying further upstream--often at auction and getting better pricing than the MLS. They also have significant leverage and control over the labor and materials. All of these things allow them to sell at market value and still make a profit. It's the same principle as the BRRRR strategy except that the forced equity goes the their profit.

3. A property turn key property will be fully and recently renovated and often have some guarantee. This means that it will have either a new furnace, AC, roof etc or still several years of useful life. Plumbing and electrical are upgraded to modern standards if need be and their should be no deferred maintenance or big CAP Ex expenses for quite some time. When you buy from the MLS, you are generally buying an existing rental that hasn't been renovated. It could have a lot of deferred maintenance and is cosmetically outdated which can have an effect on how easy it is to rent. If the HVAC is 20 years old but still working, good luck asking the seller to replace it. So bottom line, you are going to get a better quality product with a good turn key than an existing rental off the MLS.

The key, like with anything is if you decide to go the turn key route, be sure to work only with reliable, reputable companies that have a long and successful track record. They are out there in nearly every market.

Thank you for this detailed explanation. I am still doing my research, but so far I like what I have read about Spartan and JWB. And the numbers in those markets look good too! Any red flags I should be considering with these too?

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All Forum Posts by: Lara Chinarro

Lara Chinarro has started 6 posts and replied 35 times.

Post: Smartland in Ohio, and a month for a tenant turnover

Post: Smartland in Ohio, and a month for a tenant turnover

Post: Smartland in Ohio, and a month for a tenant turnover

Post: Smartland in Ohio, and a month for a tenant turnover

Post: GC for CLeveland area

Post: How long does a water heater last?

Post: How long does a water heater last?

Post: Super newbie, looking to start with a Turnkey provider

Post: Super newbie, looking to start with a Turnkey provider

Post: Super newbie, looking to start with a Turnkey provider