All Forum Posts by: Marty Joyner

Thanks @Tom Ott and @Jay Hinrichs for your prompt responses.

As I mentioned, this is a well-vetted and popular company that all of you know very well. I could have gotten a newbie rep or something else but to say the least, we are less than impressed and have closed our wallets (and minds for right now) and are re-evaluating out entry into the REI space.

With minimal time to BRRRR and being in the DC area with Baltimore and Richmond being the only options, we may be looking more at crowdfunding or even non-REI investments.

Maybe we are mis-reading or oversensitive but we have worked hard for our money and don't want to piss it away.

So...we had decided to "go for it" and jump in the REI pool through TK's. After some exhausting interviewing and due diligence, we decided on a well-known TK marketer/broker who was very well reviewed and recommended. We got prequalified as requested and had cash in hand.

The first "off-market" property presented was nice but appeared to have a swimming pool.  The broker was unaware until our due diligence from pulling permits.  Needless to say, a pool would seem to add a whole new layer of liability, maintenance, etc.

The second "off-market" property presented was in a neighborhood that by all accounts, is the ghetto with huge crime problems.  Every site was use says stay out of this area.

Are we right to be skeptical again??  I get the providers and brokers get paid by selling properties but I do not want to get screwed either.

Thoughts??

@Brandon Hall & @Chris Clothier - Thanks to you both for taking the time to respond to my specific points.  I realize that BP is as much of a marketing platform as it is a community and many RE pros here have divergent and convergent goals and opinions.

Brandon - If I hear you correctly, the depreciation can be used to "zero-out" a property from a tax liability basis on the rental income but the remainder (if any) must be deferred to the sale of the property. Is that basically correct??

I'm sure we are like many people who are in the high W2 and have maxed out every traditionally available retirement vehicle through employers, etc, and have available capital and credit and are trying to figure out the best way to put that to work as well as minimize taxes.

You mentioned syndication and that has been part of our strategy as well but keeping in mind that the capital is non-liquid and non-leveraged.  It seems as if a combination approach may be best.

We do want to connect with as we are from just down the street in NOVA and I am originally from Baltimore with plenty of experience with Mt. Washington as a lacrosse player/coach.  I get up there quite a bit as much of my family is still there.

Chris - Being from DC, we really have no choice but to invest out of area from a passive standpoint.  This means the "trust but verify" approach and your company has been great at both.  I really appreciated the upfront info on the appraisals by your reps and love the reputation of the company.  There is risk in every investment and as the market spreads get narrower, every bit of invested capital matters.  Having done all of the due diligence and qualification work, making the final decision has been the most difficult part.

@Gary Miller...sorry for hijacking your thread!!  Our goals are 100% inline with yours.  We realized that we would probably just use and passive cash flow to pay-down the leverage on properties and potentially nor draw upon it until we are actually retired.  If our cash flow can keep us from drawing from our retirement funds as much, we can use the savings to create legacy wealth for family or charitable entities.

@Gary Miller

We are in very similar timeline and situation as you.  We have vetted several TK companies including Morris, Memphis Invest and NORADA.  I would suggest you also look at NORADA with @Marco Santarelli.  We have been very impressed with them as well.  We have been very impressed with MI but the appraisals coming in under the asking price is a tough pill to swallow for us.

I'm sure you have also realized that you and I are a bit late to the party in that Rent-to-Value ratios are in the 0.8-1.2 range now as opposed to higher in just the last few years.  2016 was a very good year for RE appreciation and newbies like us will pay a premium now.

The main reason for my post is something no one has yet to mention that we have discovered. for W-2 investors like us who don't plan to leave their jobs soon, the depreciation is not an option as a tax write-off for those making over 100k/150k of W-2 income.  In my preliminary, very conservative calculations, it almost comes out as a wash.  Now...if appreciation happens, you can recapture at sale...BUT...isn't the point of TK rentals to buy-and-hold and create passive cash flow for long-term??

I just listened to the podcast from Brandon Hall and I'd love to hear his take on this.  Because of some side-business income that contributes to our overall picture, I may have a work-around but in general, this has brought us to a screeching halt!

Curious to hear the insight of others....

First, thanks for all of the help thus far. We certainly have figure out how the "keywords" work as whenever we mention a certain aspect of REI, we get tons of posts supporting the idea of people who have their businesses in their signature or PM's telling us what they have available. My issue with this is it does make a newbie like me a little "skeptical" as I can't figure out if you are trying to "sell" me or "teach" me. With that in mind, we'd love to hear from people who have done it and have nothing to sell us.

WE are a middle-age couple (51,56) and generally well-positioned for retirement. The lower-earning (LE) spouse will have the option to retire early in 5 years while it makes financial sense for the higher-earning spouse to go the full 10. Even if we both went 10 with no REI, we would be fine in retirement.

So...the original "grab" of REI was the "cash-flow" of rentals to replace the income of the LE spouse. During the 5-year window, the LE spouse could venture into more REI of a non-"cash-flow" (BRRRR, F&F, etc.) aspect and create a retirement business for both. The other angle to this is that the brother is a GC and the discussion of the F&F business has been started. We have about $300 liquid to "play with" and have decided to put half of that to work. We have great credit, DTI, etc.

After vetting several companies, strategies and processes, we have decided to put $50k to work in a syndication/crowdfunding EQUITY purchase and $100k to work in about $300-$400k worth of TK rentals (out of area as we live in the DC area) for cash-flow that we be saved and/or used to pay down the leverage.  There is also a possibility of working a joint F&F with the brother with us providing the capital and he providing the labor and a 60/40 split (is this appropriate?).

So...just curious to hear the thoughts of other "late-bloomers" in this space, especially married couples.

Thanks to everyone in advance for your responses...

Hey Everyone...

So we've jumped into the cash-flow rental REI side of things and now are wondering about our employer based plans. Thoughts??

Details: 

Spouse 1 - private sector, frozen pension

• 700k in 401k with an employer 3% safe harbor, 6% match

Spouse 2 - public sector, full pension

• $175k in 403b w/no employer match
• Side Biz (non REI) income of about 80-100k/yr and a 90k SEP IRA

Thoughts on future contributions??  I assume Spouse 1 should max the match.  Spouse 2 possibly stops the contribution to put it to work on more rentals? 22k/yr (both of 50yo).

Thanks for the help...

We are planning to start with acquiring several TurnKey properties to begin our journey.  For the "journeyman" passive investors out there...

What seems to be the natural progression as the comfort level grows??

Just curious where the TK model has taken everyone...

Quick little update.

We explored Morris Invest and had a call with Larry Blessman.  Ask for a FULL pro-forma on an available property and got a response in 3 days.  Then sent this email on January 26th (8 days ago).

Thanks Larry,

Can you send us a list of all currently available properties??

Thanks,

Marty

Have yet to hear back...

Needless to say, we have crossed them off the list.

On a side note, have been very impressed with the approach by Memphis Invest and have a call scheduled with Norada.

What is the preferred way to get your license??  Through a sponsoring firm or outside of that??