All Forum Posts by: Thomas Staub

@Jay Hinrichs - I agree, rental ROIs have come down substantially and in primary markets you're lucky to yield any ROI. Secondary markets such as Indy do typically yield lower than 10% ROIs if you take a look at most turnkey providers. You're absolutely right in that sourcing your own deals will yield much better ROIs but isn't that part of the value prop of a turnkey company? Healthy deals with no headaches? I can easily find deals in many markets on the MLS and rent them if I only wanted 5% to 7%.

I do know a few turnkey companies, which I cannot mention here, that offer 12% as a floor for B class or they will not offer them to the their investors. As I mentioned in an earlier post, Norada has a streamlined operation, they make the process smooth and yes, Marco seems like a solid guy. I can also say the property management team they introduced to is solid. However I'd expect they'd take less from the deal and I have intel on what they are making and for a marketing company it's high. If that fee were to come down, I'd have a product that would yield 10%+. It simply seems that the flipper and Norada are making all of the money and not the buyer and that is exactly why I now source my own deals. 

Appreciate the dialogue @Jay Hinrichs @Mike D'Arrigo

@Mike D'Arrigo - Fair point and respect your questions. As an avid real estate investor and one with a background in finance, I can assure you I have measured the investments aforementioned in detail. Here is a summary:

1) Did I achieve the rents advertised? Yes

2) As of now no true vacancy however, single family homes do not average 5.0% as in most models. As you know when a SFH is vacant it usually is for 1 month or 1/12 or 8.3% not to mention the lease renewal fee which further drives down the ROI so again, the Norada model is not baking in all costs.

3) Over time I have seen their margins increase and their advertised ROIs contract. Now part of this is the fact that the general market is offering lowering ROIs in such secondary markets but part of it is their general greed for profits. I now source deals in Huntsville where they are at and I am yielding 14-18% Cash on cash with conventional financing yet they offer 10-12% at best. 

4) Investment Advisors: When I was pursuing a fourplex thru them, and asking a few questions more than the typical investor, they stop returning my phone calls and stopped the deal. Additionally when a deal fell thru because the financials were not going to pan out as advertised, I never received my earnest money back. 

So, hard to tell if you are another one of their sneaky investors or truly wanting to learn the details. Hopefully I provided the latter and if you are the former, please let Marco know his game is being discovered and the damage control will take more than a podcast.

Best,

TS

Larry nailed it right on the head. 

@Larry Friedundefined

I have experience with this group. 

Strong Points: Coordination. They do have a smooth process down and are in several markets. 

Downside: All of my properties are performing under 9% cash on cash ROI.... This backs out vacancy. If you factor vacancy allowance I'm barely hitting 7% ROIs. They mark up their properties way too high. Their investment advisors are a bit sneaky too as I had a bad experience in Huntsville. Marco is polished but it is becoming more clear they are simply trying to squeeze every last penny out of a deal. I am not having a hard time selling these underperforming properties as I need to hold them for 3+ years to make up for the closing costs. Overall I wish I hadn't invested with them.