All Forum Posts by: Scott Lundgren

@ Nandish Parmar

Rent to Retirement has a lot of resources for investors that are just starting out.  We offer free consultations to get you in the best position to start your investing.  If you would like to schedule a time with us you can do that here: Schedule a call

As a reminder and to be abundantly clear, Pat Wagner is NOT a RTR client & NOT referring to his experience with RTR. This is good advice to share in general when buying REI anywhere (regardless of TK or otherwise), but we want to ensure readers are clear this has nothing to do with RTR since this thread is specially speaking about RTR which is overall a very positive post. We do not allow our investors to have these types of experiences without intervening to help resolve these types of situations.

@Michael Germano

Thank you for the follow up. As in most cases, the answer is always, it depends. You gave some projections on the property, but no other information. What market and neighborhood class is it in? Does it fit your investing goals? What other investments are you comparing this to? What are your short and long term goals? What else are you currently doing with your money? What tax benefits are you taking from REI? Who is the team that is managing and handling the property? Is this home TK, or newly built, or does it need work? What does the rental and market appreciation look like in the market, etc.? I could go on and on, but this goes to show you that each investment and investor is different, and it's all about finding an investment that fits your buying criteria and needs. Not just looking at projected numbers and that is all. The most successful investors have a specific investment plan that outlines exactly their buying criteria, and then take action to buy properties that fit that criteria. I can tell you that a lot of what we currently buy is break-even cash flow, but these are newer properties that are in excellent areas that will have strong appreciation and rental increases year after year. So year one may not be very attractive, but we know in many years it will be worth much more and cash flow significantly more. Also, we buy most REI for the tax benefits we receive which drives a lot of our decision making. Even if a property is break even cash flow, we may be getting a double digit return just based on the tax benefits alone. Hope this helps.

Also, here are some more resources for you to review with investors talking about their investing experiences on many of these topics:

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/44/topics/1058814-first-time-with-new-construction-cape-coral-fl?highlight_post=6055029&page=1

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/co/RentToRetirement

@Michael Germano
Thank you for your interest in RTR. Both teams mentioned are highly regarded as leaders in the TK industry that have an outstanding reputation on BP & in general. However, the business model, markets, asset classes are different. REI does everything in house including property management which is important to know they take every part of the investment experience very seriously. I believe their main asset class is either rehabbed or new construction SFR in 6-8 midwest markets. RTR identifies and creates local teams in the markets we want to work in based on investment criteria, but we do not own our own in the markets. Our owner has had experience owning PM previously and helps to ensure each PM follows a strict set of guidelines to join our network. RTR mainly focuses on SFR & small MF in the midwest and SE. We also have a variety of different asset classes and investment options as well to include STRs, Syndications, larger MF, Creative Financing acquisitions, build to rent (BTR) with immediate equity, etc. Ultimately it depends on which team aligns with your goals more, or in my opinion, it's never a bad idea to invest with both.
For your point about interest rates, just keep in mind that the numbers you are running is year one analysis. Rents traditionally go up year after year, and interest rates fluctuate. Yes, it's hard to cash flow on many rentals only putting 20% down right now, but this will not always be the case. Year after year your rents should increase, improving cash flow, but you can always refinance when rates come down. I can tell you there are many people still acquiring REI right now in good markets, but they do not plan on keeping their 8% interest rate forever. They will refinance once the rates drop, but they still were able to build their net worth/financial situation by acquiring the property now to let it appreciate over time along with the tenant paying the loan down & using the significant tax benefits of investing while the rates are high, especially to offset inflation. That is why it makes sense to still buy REI in these times, is that you cannot think of things in just year one ROI/cash flow. This is a long game. Any positive cash flow is icing on the cake with all these other benefits. When there are less buyers, better deals can also be negotiated!
Hope this all helps. Feel free to reach out to the team at RTR to answer any questions you have at any point. Don't sit on the sideline. Create a plan & make it happen!
-To your success, the RTR team!

We are not sure how to respond to this post. You stated you did not buy through the RTR network, and then went on to mention you had issues with your property. I don't think this should be a reflection on RTR if you did not purchase from our team in this area. I'm sure everyone would appreciate it if you would be specific on exactly who you purchased the home from & who you are encountering issues with for transparency. That is what these forums are for. Otherwise I don't think this post is adding value to the BP community as a whole. If you did not purchase through the RTR network, then this should not be a reflection in any way on RTR. For the record, we have one contractor we work with in the KC market. His name is Andrew Ross, and we have many clients that have had a great experience working with him for years now. RTR is a licensed MO broker and has a very meticulous vetting process we follow for anyone that wants to join our network. We have accepted less than 3% of the contractors/builders/brokers/sellers/property managers that want to join our TK network because they do not meet our standards. A post like this is probably best on its own thread talking about the people/team you actually worked with in KC since it was not RTR.

Lorene,
We are not sure how to respond to this post. You stated you did not buy through the RTR network, and then went on to mention you had issues with your property. I don't think this should be a reflection on RTR if you did not purchase from our team in this area. I'm sure everyone would appreciate it if you would be specific on exactly who you purchased the home from & who you are encountering issues with for transparency. That is what these forums are for. Otherwise I don't think this post is adding value to the BP community as a whole. If you did not purchase through the RTR network, then this should not be a reflection in any way on RTR. For the record, we have one contractor we work with in the KC market. His name is Andrew Ross, and we have many clients that have had a great experience working with him for years now. RTR is a licensed MO broker and has a very meticulous vetting process we follow for anyone that wants to join our network. We have accepted less than 3% of the contractors/builders/brokers/sellers/property managers that want to join our TK network because they do not meet our standards. A post like this is probably best on its own thread talking about the people/team you actually worked with in KC since it was not RTR.

Lorene,
We are not sure how to respond to this post. You stated you did not buy through the RTR network, and then went on to mention you had issues with your property. I don't think this should be a reflection on RTR if you did not purchase from our team in this area. I'm sure everyone would appreciate it if you would be specific on exactly who you purchased the home from & who you are encountering issues with for transparency. That is what these forums are for. Otherwise I don't think this post is adding value to the BP community as a whole. If you did not purchase through the RTR network, then this should not be a reflection in any way on RTR. For the record, we have one contractor we work with in the KC market. His name is Andrew Ross, and we have many clients that have had a great experience working with him for years now. RTR is a licensed MO broker and has a very meticulous vetting process we follow for anyone that wants to join our network. We have accepted less than 3% of the contractors/builders/brokers/sellers/property managers that want to join our TK network because they do not meet our standards. A post like this is probably best on its own thread talking about the people/team you actually worked with in KC since it was not RTR.

@Matheu Santos

Thanks for the interest in RTR! We always feel it is essential to verify as much information as possible in any investment you are considering as part of normal due diligence. The only thing I would add is to be aware of who you are asking for information. It's not uncommon for someone that wants to steer your business to them instead of working with the team you are considering by not giving fully accurate responses, or possibly try to discredit the company you are asking about. I recommend being strategic in how you ask these questions to local managers/agents, etc. Everyone in the industry will try to earn your business, including us. An investor that owns properties in the same area that isn't incentivized to give you unbiased answers would be an excellent resource to get more information. We highly encourage you to speak with other investors that are familiar with the area you are considering. Of course, we have many investors that are investing in these areas with us & can provide input on their personal experience concerning rents, etc. We are happy to put you in touch with them. As you can see RTR has an exceptional reputation in general & especially on BP. I've included some reference links below for you to proactively get in touch with other investors & read through their experiences.

Concerning rent numbers, of course there could always be some variance, but usually not significantly. This could be rents coming in above or below the projected amount IF the home isn't already rented. Many homes are already rented showing the actual rents. For those that are under construction & not rented out yet, we have a very good idea what they will rent for based on working in these areas consistently. Zillow and general online sources are not always the most accurate to predict specific neighborhoods as boots on the ground teams would be a better resource. I would say we more often see rents coming in above vs below amounts in general. A good example of this is in SWFL where we anticipated new construction homes to rent out for around $1,850 initially. When the homes were completed the rent demand in the area allowed rents to actually be in the $2,300 to $2,500 range due to market conditions. Those investors are stoked to achieve much high rents than anticipated & much higher ROI/cash flow. Also, if there is a big discrepancy in rents, in many cases a rent gap coverage can be offered.

Ultimately, do your typical due diligence always. Speak to the team you are working with to provide justification/verification of rents among other aspects. Work with a team you feel confident/comfortable with & take action!

I hope this helps. Feel free to reach out at any point in time with other questions.

To your success!

Henry, thanks for the insight. Just for clarification purposes, we don't invest in Chicago as it doesn't fit our model for those very reasons. We use 3% as an assumption on homes that are fully renovated or newly built, which is reasonable. New construction for example, which is the majority of what we do, will have no capex or maintenance for many years with builder warranties in place to cover all maintenance along with long term foundation, roof, HVAC/mechanical warranties, etc. In those scenarios having a lower reserve for capex and maintenance would be completely appropriate. Just wanted to clarify this to your response. If someone is buying a home in a lower class area, older home that hasn't been updated, etc., then yes, higher reserves would be necessary. As you can see RTR has an exceptional reputation on BP for many years earning more positive reviews than any other TK company. REI isn't always perfect, and obstacles come up, but we always assist our clients to navigate issues when they do arise.
Here are some positive threads to read through from investors that have worked with RTR:

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/44/topics/1058814-first-time-with-new-construction-cape-coral-fl?highlight_post=6055029&page=1

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/co/RentToRetirement

https://www.biggerpockets.com/forums/92/topics/929410-rent-to-retirement-updates?highlight_post=5508807&page=1#p5508807

https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

https://www.biggerpockets.com/forums/311/topics/915728-experience-with-rent-to-retirement-turnkey?page=1#p5345200

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/67/topics/952977-turnkey-in-indianapolis-through-rtr-case-study

https://www.biggerpockets.com/forums/12/topics/997350-lessons-learned-from-buying-my-first-rental-property?highlight_post=5748036&page=1#p5748036

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/forums/48/topics/874096-reviews-on-r2r-and-nch?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5123754

https://www.biggerpockets.com/forums/311/topics/883772-turnkey-investing-renttoretirement-feedback-reviews?highlight_post=5171720&page=1#p5171720

https://www.biggerpockets.com/forums/92/topics/950188-rent-to-retirement?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5535505

https://www.biggerpockets.com/users/ZacharyCole/references

Just to clarify the latest post on this thread. This brings up many good points about hiring inspectors and going through the same due diligence process you would when buying any property. It's essential to have a property inspection, appraisal & ensure obtaining a clear title prior to closing. Make sure to speak with any manager you work with to ensure they are the right fit. To clarify, this person is NOT an RTR client. We want to make that distinction since this post is on a thread mainly about RTR even though they are talking about TK in general. It's also important to look at the accounts posting comments like this. Accounts that have no personal information, opened recently, and only have one or very few comments are most likely fake accounts. We have seen competitors, or people in other businesses that compete with TK, posting things like this from fake accounts to deter people from exploring certain types of investing. I wish BP would have more of a vetting process to verify information. We can see that this account was opened less than a month ago, has no personal information & only has one negative post. No further interaction with anyone on this site. Lastly, I'd like to point out the part about positive comments. People will not go out of their way to post a positive comment if they haven't had a positive experience. This thread is 5 years old with a great deal of positive feedback for years. We highly recommend doing due diligence in purchasing any property, but also using some discretion with reading comments on public forums like this.