All Forum Posts by: Rob Hakes

I guess its a good sign that haven't really had anything to post lately.  Both of my properties with Spartan have stabilized and have been getting consistent rent (even through pandemic) without any maintenance costs.  I think these buggers will actually be a boon to my portfolio this year rather than the drag.  THat feels good.

Hope i didn't jinx it. 

@Andrew M.

I will need to echo what @Caleb Heimsoth has said as i to am somebody that has been down the turnkey road for a few years.  Cashflow projections are too high.  You will have a few months where you see it cashflow over $200/mo but there are way too many things that can go wrong with a turnkey property that was purchased at top dollar.  

The taxes will increase.  If you are calculating taxes at $62 there is a good chance after a year or two the county will realize that you are not an owner occupant and you will lose that exemption, or they will just realize that they can charge more in taxes to an out of state investor that can't/won't come and protest.  

Also your mortgage rate looks a little low for an investment property, but i haven't looked in a while so i could be wrong.

On one property the taxes started at about $750.00 a year and two years later are at $1150 a year.

I was and am very excited about the turnkey model, but the numbers don't lie.  They are crappy returns thus far.   Really the only hope of having these be a really good investment is if i can see some good appreciation overtime.  That's not a really good model if you are planning on cashflow and the chances of much appreciation in these markets is sketchy.

There are other solid passive investments that have proven to be more stable with higher returns.

Remember when the 1% rule was the 2% rule?  About 4 months ago it was turning into the .8% rule.

@Bradley Ritter

I think immediately there may be a drop in performing note prices.  

Say a note has been performing for 12 months.  In the past you would pay a premium if it had a good rate and was clean.

Right now unfortunately past payment history doesn't mean much which should push prices down if a seller needs to get rid of it.  Or in other words, I wouldn't pay full price for a performing right now regardless of payment history unless you were fairly confident the borrower had a solid job and was not going to jump on the 'forbearance' train.

@Jordan Meyer

The reason we pay a PM is because we primarily need them to manage people.  This cant just be automated.  Any good PM already has a full array of automation in place for their systems, but a great one will know how to manage your tenants.  This takes a lot more than some fancy software.  I will gladly pay a PM 10% if they know how to manage my tenants.

Maybe a Deep Fake?  Totally bizarre.

@Will G.

Wow! He must have been following his own advice.

Not surprised.

Fortunately not all landlords are subject to what Trump think he dictates behind the microphone.  The CARES act only applies to homes that have loans that are federally backed (fannie and freddie) and the remaining is up to the states.  Some states made the same mandate similar to giving surgery with a cleaver rather than a scoupel.  

In Utah the governor has mandated that eviction be put on hold till mid may if: The tenant was current by March 31st and they have documentation that they have been affected by Covid-19.  That sounds reasonable and makes me feel like some state sovereignty is still in tact.

Unfortunately for me though, my only Utah property is federally backed and the tenant was behind before the Corona hit, so I cant take any action till late July.

@Anthony Wick

I agree with your sentiment that a blanket discount is just bad business.  However in this situation with these being OOS properties, a turnkey provider, and quite an unprecedented world circumstance I am not inclined to try and work this out with each tenant on an individual basis.  Though i would typically expect my PM to take care of this, its hard to know how this high volume of 'work outs' will go with current work restrictions.

I think i will handle my renters that i live close too and personally manage more similarly to @Joseph Hammel.  Love the credit card idea.  Let them pay the cc company back over the next 6 months rather than you.

Also, i think we underestimate the large amount of tenants out there that COULD pay but will use the Covid free pass as long as they can (not knowing that they may still need to backpay) once it all blows over.  Anything i can do to weed that out the better.