All Forum Posts by: Sarah Lam

@Charles Worth Thanks for sharing your two cents. Honestly, I had high hopes for ABC Capital. Unfortunately, the sheer number of issues I've encountered have been significantly higher than any property I've purchased with my own realtor, managed by my own PM. I don't expect perfection, but I do expect for the product to be at least somewhat as advertised. For a turnkey company, the process is as much of a product as the actual property. And as Jay himself agreed, his team dropped the ball multiple times.

The tax abatement was mentioned several times in Maverick Investor's webinar pitch. It was also included on the available inventory list sent to me by Jay's team. Jay's team also mentioned it to me while I was selecting my property, and of course Jay's team also told me the abatement had been taken care of for my property without even checking into if it really had been completed. To learn now, 1 year later, that it was never done, and I can no longer receive it is infuriating. Count it as another ball dropped.

This thread here is a great example why people who are unhappy about companies are unwilling to speak out publicly. I posted this review because I get dozens of BP users messaging me week after week about my experience with ABC Capital. It's a lot to type out every time. All I did was share my experience and how the actual product and process stood up to ABC Capital's marketing pitch.

Every single issue I had with ABC, I tried to work out with them with varying degrees of success. Unfortunately, little progress was made until I made my issues public on BiggerPockets. I have all the screenshots and emails with date and time stamps logging my correspondence. Emails that would go unanswered for weeks at a time. There is no slander - it all happened. So yes, my issues were fixed...AFTER I had to publicly announce them.

I am open to exiting the property, but not selling to Jay. My refusal to sell to him should not be taken as an endorsement of the product.

Glad to hear that ABC has been proactive about their awful property management - I hope it improves for the sake of their customers.

By not disputing all the ways Jay's team has dropped the ball, he has admitted that he has messed up almost every single aspect of his B-R-R method that he built his company on. 

Buy - he advertised a 2 BR, but the second bedroom cant even fit the smallest bed while still being able to close the door. It's incredibly misleading if the second bedroom can't even fit a bed. 

1 year rental guarantee - Above, Jay mentioned he would have continued paying the $1300 rental guarantee indefinitely. When we spoke just prior to my terminating the property management agreement, he texted me, "The rent guarantee is for 12 months of payments. It doesn't extend it for construction delays." Once again, Jay has offered conflicting statements. 

Tax abatement - his team told me it was already done, even though they clearly never bothered to actually check. Now that 10 years of tax abatement is out the window, and my property is being assessed for the new value post-renovation. ABC had 7 months to do this, but never did.

Renovation - I didn't even mention this, but his structural engineer who he paid to show the property was structurally sound so I could submit it to the city to clear the violations even mentioned that there was water leaking into one side of the basement. The property had been vacant for 10 months - clearly there was an issue that was missed. I have since had my new property manager resolve the issue at my expense. 

Permit issues - this one really gets me. Jay personally assured me his team was looking into the violations for MONTHS. Finally, I had to take matters into my own hands to resolve it, under the threat of losing $100K+ in fees and dealing with a legal battle with the city. I can assure you that if the city kept me on the hook for those fees, ABC Capital would have seen their first lawsuit. 

Rent - 10 months without a tenant! Lowered the advertised rent without explaining their policy. The rent guarantees were direct deposited later and later each month until we were nearly 2 months behind. Sure, I got the money in the end, but their operations is a nightmare.

Does any of this sound like the turnkey property they advertised? There was nothing about this process that was painless or passive. 

And sure, Jay eventually addressed most of my issues after I blasted him on biggerpockets. But waging a public war on an online forum is not for everybody - I've had multiple unhappy ABC investors reach out to me directly sharing their horror stories of waiting months upon months for resolutions while Jay's team did nothing, but not wanting to share their woes publicly. 

I'd like to question why Maverick Investors still stands behind ABC when there are so many investors that are unhappy with them. 

To be clear - the reason why I didn't sell my property back to Jay is that there is no way in hell I would ever do ANY sort of business with Jay again. 

There's another, longer ABC Capital review thread on Biggerpockets where more investors share their experiences with the company. The general feedback is that Jay's team is so focused on selling, they've completely neglected their current investors. Their property management is atrocious.  My constructive criticism to Jay would be to focus his attention on the property management operations, or simply hire some other team to do it. His strength is evaluating deals, but his weakness is in operational execution. And it's caused me multiple headaches and honestly, regret. I hope my experience serves as a wake-up call to both ABC Capital, Maverick investors, and prospective investors.

ABC Capital review and the problem with Turnkey companies

I've done a detailed write up of my first turnkey experience in Texas with Texas Turnkey Property (link). I've seen a lot of threads asking for people to share their experience with ABC Capital as they are heavily promoted on BP.

WHY ABC CAPITAL/PHILLY INVEST:

I found out about ABC several years ago through a well known promoter, Maverick Investors. They had attractive numbers, much better than other turnkey providers I had seen. After seeing generally positive feedback on the company on BP, I contacted them, was put in touch with one of their sales guys named Ari, was the most helpful of anyone at the company. He sent me some properties to look over and I chose the one I was most interested in. It's located in Brewerytown, which promised strong appreciation with modest cash flow. Obviously, appreciation should never be relied upon, but a lot of the factors I look for in a successfully gentrifying market (proximity to transit, beautification efforts by the city, employment nearby, development in the neighborhood, all verified by the Philly planning commission) made me comfortable with my level of risk in pursuing this strategy.

In a gentrifying neighborhood, I figured I would have the greatest shot at a successful buy-renovate-rent-refinance strategy. The purchase price was $155k, their ARV estimate was $220k. My intent was to take out as much as possible through the refinance and purchase a second property with ABC that would cash flowbetter.

I did my research on the property, had a local realtor unaffiliated with ABC give me their opinion on Brewerytown; he alsopulled some comps for the neighborhood for me and crazily enough, ABC Capital's estimates for both ARV and rent seemed right on.

So I pulled the trigger. All cash, closed within 3 days.

THE PURCHASE:

I purchased a property that was already close to being finished with renovation. Usually, these renovations take several months. Instead, it was completed several weeks after closing, around late April, which was great. I started the process of refinancing using a local lender they recommended. (Side note: ABC advertises a B-R-R-R strategy, but if you are out of state with no affiliation to Philly, their local lenders are actually local credit unions and won’t lend to out of state investors.) I found a lender on my own, but the appraisal came in short - $190,000. Disappointing, but not a huge deal.

In both of my turnkey experiences, purchasing has been the easiest, smoothest part. But when the time comes for property managers to take over, it's clear that this is the Achilles heel of turnkey companies.

RENTING/PROPERTY MANAGEMENT aka WHERE **** HIT THE FAN:

First major issue was with renting the property out. In such a hot neighborhood, it should be easy to rent out a well-priced, newly renovated property. A month went by with no activity. I checked on my property's address on google and found two issues:

1.They were using a google street image view of the property pre-renovation with crumbling stucco and all as the first image on Zillow, Trulia, etc. No wonder it wasn't getting any interest! I asked ABC to remove the google street images view of my property and replace it with a renovated one.

2.They had lowered the rent to $1150. I never received an email from ABC informing me of a change. I asked Ari about it, and he explained it was to get somebody in the property quickly and the rent guarantee would pay me the difference. He also said that the rental guarantee of $1300/mo was good for at least one year, but if that first tenant stayed for longer than the year, then the rental guarantee would still pay the difference for the entire duration of the first tenant. I felt that ABC should have let me know before the price drop, not after.

I reached out to a local property manager not affiliated with ABC to get her opinion, and she agreed it was priced right at $1300/mo, but that it wasn't listed on the MLS, which was probably why I was having a hard time finding a renter. I brought it to ABC's attention and they told me that upon further review, they've agreed to start paying a broker to list properties that rent for over $1000 on the MLS. Ari told me they were going to send someone out to take pics of my property that day.

After 2.5 weeks, I asked for an update on whether or not it had been listed on the MLS yet. One of their property managers who explained that my property was burglarized two weeks prior. Uhhh…what? Look, I get that **** happens. ABC Capital has no control over something like a burglary. I wasn't upset with them that it happened. However, I was upset I wasn't informed earlier, especially since I had been checking in regularly throughout that time period. The response from the PM was that they just jumped into action and didn't stop to inform owners. While I appreciated the action, surely after 2 weeks the hubbub would have died down enough to inform the owner.

I asked them what the timeline for repairs was. No progress had been made with repairs because the police department has not come out to file the police report.After the police came out 4 weeks after the burglary, renovations began again. It took about 6 weeks to be completed.

After the second renovation was complete, I waited for news of any renters. In the meantime, the following issues popped up:

1. I received a notice from the city water department threatening to shut off the water. ABC property management had told me they would cover the water bill during renovation and vacancy. Jay told me I was misinformed by his team, but did not offer to cover the cost of his team’s mistake.
2. I received several notices from the city inspection department stating that I was in violation of their building permits. I sent these notices to Jay, who assured me personally that his team was aware and already working with the city inspectors on it. Finally, I received a notice from the city stating they were going to take legal action against me and the fines accrued were well into the 6 figures. Pissed, I reached out to Jay who was incredibly rude towards me. I ended up having to call the city over several weeks to work with the city inspectors directly, ALL of whom denied ever having spoken to Jay’s team on my case. Jay did hire a structural engineer who walked the property and gave his approval that the property was structurally sound. The city inspectors took the report and listened to my frustrating story and cleared the violation without requiring me to pay anything. I think they felt bad for me.
3. That 10 year tax abatement that was advertised by ABC Capital was never completed, either. Jay’s team is incompetent at best, dishonest at worst. I recently received the tax assessment and the value had increased substantially. I was confused because Ari had told me the tax abatement was already taken care of way back when the property was renovated the first time. After calling in, the city made it clear that the deadline was December 2017, and I am no longer eligible for it.

   After 10 months of collecting the rent guarantee without any renters, I noticed that they had dropped the advertised rent to $950, still without letting me know. That’s a huge drop from $1300! Fed up and pissed off, I fired ABC. It took about 2 months to get my final statement and deposit. My new PM walked the property and mentioned a few things that ABC had skimmedover:

1. ABC neglected to replace the fridge for some reason (it was included in the scope of work). Jay reimbursed me the cost of a fridge in my final deposit
2. I had purchased a 2 BR, but the second bedroom was so small, you couldn’t fit a twin size bed with the bedroom door closed!! No wonder the appraisal came in under and $1300 rent was too high!

Within 2 weeks, my new property manager had found a renter paying more than the $950 ABC was advertising. No issues with my new property manager.

To all the ABC prospective clients that have been reaching out to me directly for my experience, I hope this is enough to deter you – no returns are worth this much headache. I would stay far, far away from ABC Capital. You should also know that current investors unhappy with ABC have contacted me in the hopes of organizing legal action against the company. Their property management company also apparently has a class action lawsuit being built against them by another commenter in a different thread.

To all the current ABC investors who are unhappy with ABC have also reached out to me, if you need a new PM, let me know. I have been referring others to my new PM.

TLDR: ABC is the worst; false advertising, impotent property management, lawsuits incoming, stay away! Issues summarized:

1. Property was advertised as a 2 BR, but the second bedroom can’t fit a twin size bed.
2. 10 year tax abatement – ABC’s property management never registered it, told me it was done, and now it is too late for me to register with the city
3. ABC never contacted the city for a final inspection, causing the city to threaten legal action against me and accrue well over 6 figures in fines that I had to resolve on my own.
4. Never found a renter for me after 10 months. My new property manager found a renter in 2 weeks for more than what ABC was advertising.

Hi @Sharifa Bradley,

You are actually not the only person who has mentioned building a class action lawsuit. Other unhappy investors have reached out to me.

@Fred Stevenson yes it was just recently resolved. Jay hired a structural engineer to write a report saying it is structurally sound and submitted it to the city inspector. I still had to call up the city inspectors every few days to make sure it was resolved satisfactorily. I basically explained that I had purchased the property midway through renovation, and they were able to clear the violation and i think they felt bad for me, too, so they resolved it without charging me anything! 

THIS is what happens when ABC capital and Jay walsh handles your renovation. They do not pull permits for the repairs. The city will notify you, you will pass it along, since they are your project managers and responsible for construction.you will follow up with them each time you get a notice and they will assure you their team is talking to the city inspector. Jay himself will assure you of this. This will go on for months until you receive a final warning and notice that the city is imposing daily fees. At this point you will demand a response and he will treat you with total disregard and attitude. 

I have text screenshots to prove it. 

Jay: ok I will look into it but I am sure I won’t get an answer today.

Me: I will follow up tomorrow and each day after until we get a response

Jay: lol have fun with that

Me: excuse me? Jay, your team who did the construction was responsible for these permits. Clearly it’s fallen off the radar, so that is why  I need to follow up with you daily to keep it on the horizon.

Jay: you’re excused. I will enjoy your morning texts.

Me: what kind of construction team do you have that can’t be bothered to get the proper permits to do their repairs?

No response from Jay. 

@Jay Walsh

@Jay Walsh waiting for your response :) will continue to follow up daily with you despite your rudeness :)

Holy cow, this blew up. I did speak with @Jay Walsh this morning and I think we've figured out a way forward. I'm still working on an in depth review of my experience with ABC Capital, just like I've done for all my previous deals, so y'all will be able to make your own judgments.

It's never my intent to cut anybody or any company down, but my comment definitely prompted quite a response. I woke up to 3 emails regarding my comment, including one from Jay himself. 

As Jay mentioned, my newly renovated property was burglarized. :( As an investor, I understand every investment comes with risk. I'm not upset with ABC that the burglary happened. However, it's been extremely difficult getting any information in the three weeks following the burglary. I had asked several times for a timeline for repairs. Jay's team did respond, but their responses were only to say that they were looking into it. I hadn't received any actual information. Yesterday, I called in 3 times trying to get on a phone call with the property manager. I left messages twice requesting that she call me back before EOD. She got the message but emailed me back a response that still didn't answer my question. I asked her again to call me. No response. 

As Jay mentioned above, his team is working on resolving things for me, but without any communication, it's unfair to expect me, an out of state investor, to blindly trust that. My requests for weekly updates seem completely reasonable given the burglary. 

We have since connected, Jay explained what they are doing behind the scenes to me over the phone, just as described above, he has offered to give me weekly progress updates via text, and I'm optimistic that this will get sorted out soon. 

I bought a Buy-renovate-rent-refinance property in April from ABC Capital. I will be posting an in depth summary of my experience soon, maybe tomorrow. 

It's honestly been a nightmare, and I've been waiting to post my experience to give them time to correct it (I made a similar post about another turnkey company in the past), but at this point it looks like they can't be bothered to return my phone calls or give me a straight answer via email, so I will be posting soon.

@William C. you make a good point with the appraisal being accurate and the turnkey provider being greedy with the list price. Looking back, I think I believed TTP too easily, giving them credit for knowing the market better than I as an out of state investor did. While I did crunch the numbers and did some due diligence, it's been a good learning experience for me thus far on what i could have/should have done better. Is it a bad deal? We'll have to wait and see once I get out of the property, but I'm not kicking myself for trying something new. At the end of the day, the property was a $90k experiment. It's a low price point that I felt I could afford to take a gamble with in order to test the turnkey waters. As I said in an earlier post, do I regret it? No; Ive learned so much. But would I buy a turnkey property again? Yes, but not from TTP. For those of you who have enjoyed reading about my turnkey experience, I just bought another turnkey property from another provider (not in texas) in April. I will make a separate post for that soon, so keep an eye out for it.