All Forum Posts by: Mark S.

@Chris Clothier, when do you think you guys might enter the KY market and what product type/price points do you think you’ll be offering?  I’m in KY but am a passive investor that would love something here but also want to be 100% hands off. 

Ouch.  I would have hoped they would work with you on the difference.  Will they instead pay the $500 for a new appraisal (that will hopefully come in higher and that the bank can lend on)?

@Jonathan Beaumont Considering their waitlist is approaching 2 years, I’m sure they’d have no problem getting another investor to buy it.  With that said, I believe they will also offer you the option to simply switch and get another of their properties.  You could always run into the same issue, but personally I never have and I have several rentals with them.  The last one I purchased, I actually bought at $2K under appraised value; it’s now worth about $20K over what I paid (not that I really care because I bought it for cash flow and do not have plans to sell).

What is the purchase price vs appraised value on your deal?  What are your numbers (rent, expenses/reserves, and cash flow)?

@Abigail Cariaga, Mid South Home Buyers.  Waitlist is extremely long, though.  I worked with one other Memphis group, but wouldn’t recommend them. If only I could find another group in Memphis like MSHB but a shorter/no waitlist.  

@Lynn Quire, all I know is what came up in a Google search about Keener.  Another investor mentioned something about him and I Googled to find out more. 

@Annie R., yes I do have a tax advisor.  I pay a mini fortune, but they know their stuff and I highly doubt anyone locally would be as knowledgable.  It’s definitely a large expense, but the way I see it:

1.) I like having a tax team essentially on retainer to answer questions as items come up throughout the year

2.) I can be confident my taxes are prepared / filed correctly

3.) Because of what I pay, I feel like I'm incentivized to keep investing in REI and almost "grow into" what I'm paying for

I could probably try to do it myself (before REI, I did my own), but I can almost guarantee I would make mistakes, possibly miss deductions, and worst of all pull my hair out (all while always wondering whether or not I'm "doing it right"). Some people try to do everything themselves and that's fine, but I am a big believer in the true value of having professionals on your team (tax, legal, etc.).

@Annie R., I am a high earning W-2 employee myself. I can barely change a lightbulb and have zero aspirations to DIY real estate. Life is too short for property management. I am all about being as passive as reasonably possible. Personally, I do a combination of real estate note funds, syndications (mostly multifamily, but looking to possibly expand into self storage or mobile home parks), and turnkey single family rentals. They all have pros/cons. I should also say that I am heavily invested in the stock market and will continue to do it all over time. My net worth is significantly higher than the threshold that Lane mentioned above, however, I am still a huge fan of turnkey rentals - especially with long term, 30-year fixed mortgages. He seemed to have a bad experience with turnkeys and evictions, etc. Although nothing is perfect and there will always be bumps in the road, my turnkey experience so far has been overwhelmingly positive. High level plan is real estate investing for early financial freedom and traditional market-based investments for phase two of retirement at a more "normal" retirement age (and also as a backup plan if my REI happens to blow up in my face). Hope that helps.

@Kelly McClellan, I had a call with them years ago.  They seemed okay but also seemed very much focused on cash buyers only (first red flag).  They had a 4-plex come online and I asked if they would accept financing on it and they said they would.  After further research, I decided to pass on it.  I would occasionally get emails from them and it was difficult to get a response back when I’d reply, so I just decided to move on.  Over the years as they’ve apparently grown bigger, they seem to project a “better than thou” image with a chip on their shoulder and that doesn’t sit well with me.  Not too long ago, in an effort to clean up their email list, asked if I wanted to be removed and then tried to refer me to another turnkey group in Ohio (that I had already connected with and visited) to pick up a quick referral fee.  I called them out on it and never heard from them again (and hope I never do).  What a waste of my time.  

@Brandon Kamaka, different strokes for different folks, but you could absolutely get a PM for 4 units.  I have a PM for my 5 SFRs (actually two PMs - one manages one; the other manages four).  My time is too important to me to manage my own properties.  I realize I pay handsomely for that, but I have a great team and as others have said, “life is too short for property management.”  I let them do what they do well, factor it into my underwriting, and enjoy my free time and sanity.  :-)

@Mark Koster, great write up.  I’m in a similar situation and also invest in both.  I don’t really have much to add at the moment, but am interested to hear others’ thoughts and will be following this thread.  Perhaps I’ll be able to jump in later with more meaningful feedback.  I guess the only thing that comes to mind at the moment is the benefits of the long-term, fixed interest rate debt on the turnkey rentals that can be locked in at today’s low rates.  As others have said, “the deal is in the debt.”  I think this needs to be included in the overall return profile of the turnkey route.  Yes, syndications also generally use leverage, but as you mentioned, the exit is fairly short term.  These 30-year loans on turnkey rentals will probably look REALLY good going forward based on where things are today and where they could be heading (inflation, rising rates, etc.).