All Forum Posts by: Sarah Lam

@Kevin Wood it's not a full month, but I think something close to that. We closed on 10/4, so I haven't seen enough from Real Property Management to warrant changing property managers, but I do wish they took more initiative with communicating updates. Plus, as @Natasha Keck points out, my rental guarantee means I still get paid even if the property is empty. Beyond the lack of communication, I wouldn't say I'm unhappy with Brian and Shawn's team, just a little wary. With the short appraisal and the drop in rent, it makes me question their understanding of the neighborhood. I hope I'm proved wrong, though! As I said in my original post I think Shawn's team is honest and reasonable. 

Hi @Kevin Wood, i did check rentometer, and zillow. The rent seemed reasonable for a renovated property. I'll have to look at Craigslist as well in the future. Thanks for the tip! 

It looks like they lowered the rent to $1000/mo. I haven't received any communication from the property management team informing me of the rent drop; I saw it on Zillow. Still no word about tenants. Not thrilled about the lack of communication from Real Property Management. 

Hi @Gaurav G., 

1) I was looking for long term cash flow, so I wasn't planning on selling it anytime soon. Plus at $90k, $1100/mo rent is over the 1% rule, which is particularly rare for turnkeys that I've seen, anyways. Yes, I could've taken my earnest money and walked away. 

2) Yep, that is their rental guarantee. $1100/mo no matter what for the time specified. 

Inspired by similar posts about turnkey companies,  I wanted to share every step of my experience with TexasTurnkeyProperties.com, which offers turnkey properties in the Houston area. 

I purchased one side of a duplex in Spring, TX. It's a standard 3BR/2BA and the purchase price was listed at $99,900 with rent projected at $1100, a 1 year rental guarantee and a 1 year home maintenance warranty. I was given a scope of work, and spoke with Brian, who was able to answer most of my questions. We opened escrow back in mid-July, and we were supposed to close at the end of August. We had to push back closing twice, until we finally closed on 10/4. The first delay was due to stormy weather which delayed renovations. I was disappointed that nobody from Texas Turnkey Properties bothered to let me know they were delayed; I had to reach out several times for updates. 

The second delay was due to an awful appraisal they received. After renovations, the appraisal came in at $84k, $16k below the purchase price. Shawn, the owner of the company, emailed me letting me know he couldn't sell it to me at the appraised price, but he would split the difference, making my purchase price $92k, but requiring more cash for the down payment. Coming from SF, I'm used to the notion of paying over the asking price, so it wasn't an automatic no for me. Instead, I countered him at $90k, which meant I was paying 7% over market/appraised price, but requested an additional year of rental income guarantee at $1100 and an additional year of the home maintenance warranty, which would at least give me some kind of value for that extra 7%. He accepted and we moved forward with closing. 

I used a lender they recommended and had no complaints with them. I have a 30 year fixed mortgage at 4.875%, and due to the construction delays being outside of my control, they didn't charge me for a rate extension.

Right before we closed, Shawn emailed me to tell me they had a tenant moving in on10/12. Unfortunately, that tenant was unable to come up with the security deposit, so the leasing office did not let them move in. I appreciated the communication from the property management team, but now that it is the end of October and my property is still vacant, I'm wondering if the projected rent is too high for the area, or if it's just a seasonality thing. Either way, I will be receiving $1100/mo for the next 2 years, beginning in November, so I am covered, but it does make me question how well Shawn and his team truly know the neighborhood. 

For now, I think it's too early to tell. The whole process was generally smooth. I would have appreciated more communication regarding renovation setbacks, but felt that the whole team was honest and reasonable. Since my intention for this purchase was long term cash flow, I'm satisfied with the terms of the deal, which is netting me about 15% COC return for the first two years.

I will update when a tenant is placed. Feel free to ask me any further questions. 

I know, crazy right?! 😂 there was a showing on 12/30, and they signed the lease on New Year's Eve!

Thanks @Johnny Aloha! Rented for $1600! I put $4k of renovations in, and got it rented out in 24 hours :)

Update! It's been a very busy holiday season - just finished renovations on my condo on 12/28, my property manager listed it on Craigslist on 12/29, had a showing on 12/30, a Navy couple signed a 12 month lease on 12/31, and they moved in yesterday! Woohoo! Can't wait to receive the first check in the mail!

That would be fantastic, @Johnny Aloha! Thanks for the tip! 

Thanks @Manly Souza and @Duc Ong! I closed a couple of weeks ago and am trying to find a contractor. I underestimated how slow hawaii contractors are to respond! Hopefully all the work will be done by December. Unfortunately, it's not an ideal time to try to find a renter, but will try anyways. The good news is that my next door neighbor listed their identical unit for $10K over what I paid and received an all cash, over asking price offer within a week! I knew Aiea was appreciate, but holy cow that was fast! 😀 Duc, I will send you a message with the contact info of my agent and keep you posted on a contractor. 

@Ally H. it is, but I would still need to do some basic things - repaint, recaulk windows, etc. it's In average condition for Hawaii. My bet was that military moving here from the mainland would be used to more modern and nicer apartments, and would be willing to pay a bit more for something that reminds them of what they can get at home. Not sure if I'm going down the wrong mindset there, though.

@Johnny Aloha I just visited Hawaii two weeks ago (during the hurricane, ha) and thought about you and your family too! How's that Kailua live in/vacation property treating you? I'm sure it's up and running now! I decided not to buy turnkey, but I still wouldn't rule it out. Just figured that if I'm going to invest in property, i would want it to be in places that I have connections to. Easier to manage, because I can always ask friends for help or advice, and I go back there anyways, so it's easier to check on them!  And unfortunately, the places that I have connections to are along the coasts, aka NOT popular turnkey areas. 

Thank you for the tips on pricing! Makes total sense and seems way easier to deal with. I definitely want to shoot for the higher side of rents to attract better qualified tenants, which is why I feel like I need to make some upgrades in my condo. 

And yes, I didn't plan it, but my friend who is an engineer working on the rail told me my condo happens to be very close to the rail! If Honolulu is anything like the SF Bay Area market (which, let's be honest, feels like it's exactly like the SF Bay Area market last year), properties along the route will see some solid appreciation. Not banking on it, but hoping for it ;)