All Forum Posts by: Rob Hakes

@Kent Lau 

We did section 8 tenants for the property from this original post.  We got market rent.  With section 8 they approve an amount that section 8 will cover then if the rent is above that the tenant pays the rest.   In this case the section 8 pays about 60%. It did take about an extra month to get the tenants in because of all the section 8 requirements and inspections. 

 Its been really nice to see the consistent rent come in.

@Jeremiah David Miller

The properties have been performing over the last few months.  Still have some issues with late payment, but i really like the late fees.  

Both of my properties have been digging themselves out of the red for the last few months.  My last look at my own yearly projections will put both of them at a loss for the year.  Bummer that these have not been good investments thus far.  You buy these things hoping to get close to a 10% return and now i am just hoping to break even (cashflow-wise).

@Caleb Heimsoth

No i don't consider a success.  I consider it a loss.  

Is my post making this property sound like a success story?

Or are you interpreting this thread as a success story because I remain optimistic about the turnkey model in general?

@Jeremiah David Miller

Yes, I have updates.  Within the last few weeks both of the houses have been rented out.  On this house (from the original post), we decided to make it available to section 8 tenants and had to lower the rent price to finally get a good bite.  This process also takes a few weeks longer for them to get the voucher approval etc.  Spartan is starting to give investors the option to use section 8 to try and grow the pool of potential renters and have a more secure income.  Ill give it a try on this one and see how it goes.

to answer your question on if i would use Spartan again...... Yes i believe in Spartan as a good team, however timing has not really worked out in my favor with how their local rental market has shifted.  In my opinion, I think for a long time they were the only dog in town and could easily fill their units at higher prices.  Now that Birmingham has become a target of investor money the last few years there are alot more nice renovated homes to compete with.  

So because the purchase price of the house is largely dependent on the expected rents, I kind of bought at a high point, and now we are having to lower rents to be more competitive, and lowering my overall return.  

So i probably would not buy another one quite yet, until I felt they had things priced to be more competitive.  They may have already started doing this but I have not actively shopped their current inventory lately.  

I really like the model that Midsouth Homebuyers uses.  They claim to keep rents just below market rate, so they have the nicest home at a cheaper price to avoid situations like this when the rental market shifts.  I have been on their waiting list. 

I still don't entirely blame Spartan Invest for the major problems i have had on this house.  For this one i am chalking it up to just a woe that most investors have to deal with every once in a while.  Hopefully things will get back on track.  Heaven knows i have some $$ I need to make up from this last year.

Dwight K Schrute-

@Veera Vala

i am not sure on the forms, but my understanding of the depreciation expense works like this:  For this house the cost of the building is approx $70,000 (you cant depreciate land) and the IRS allow you to depreciate the full cost over 27.5 years which equals about $2500 of depreciation expense per year.  So if my gains on this property (income minus expenses) are around $2500, then the depreciation expense would wipe out all the gains on paper, leaving me with nothing to be taxed on.

I had my accountant determine my building value.  He got it from my closing docs and from some paperwork from the county I think.

 @Gautam Venkatesan they did provide detailed data on the leasing progress. I don't know how much of a span this data covers.

36 Leads, of those 12 were pre-qualified, of those 8 scheduled a viewing, of those 4 actually viewed the property.

From me just watching the ad, they started the rental at $975/mo and they have dropped it a few times, now its down to $900/mo. Its been at $900 for a few weeks now. 

@Patrick Shawn Faherty

Not exactly.  They have only charged management fees on rents received so i have not had to worry about that.  Had not heard anything about mortgage reimbursement.  Ahem.  

They have been pretty good about making the turnover costs as reasonable as possible,  They have been very responsive when i reach out for updates, just no actual results in getting things re-rented.   

Just thought I would throw out another update on here.  Unfortunately nothing positive.  I just hit the 300 day mark since the last time I got paid rent from a tenant on this property.  Ouch, that hurts to see it in writing...... 300 days (no typo) 

I was super excited about this property when I purchased it, but it has been a dud so far.

@Mike S. I will thanks.