All Forum Posts by: Jesse S.

I own two out of state SFRs in Memphis that I purchased from a turnkey provider about a year ago. I’m looking to add a few more to my portfolio but I’ve had a hard time finding properties that fit my investment criteria (i.e. price point, target rent, neighborhood, etc). I’m on the distribution list for a couple different turnkey providers in Memphis for investors that are ready to purchase. Recently there were three properties that looked promising that I wanted to investigate further.   Property #1- All that was listed for this property was an address, price, and projected rent. They deal packet wasn’t ready yet so I couldn’t see the scope of work, so I requested it and they promised to send it to me by the end of the day. About 4 hours later, they responded again and said that somebody else already reserved the property (without seeing the SOW).   Property #2- Full deal packet was available, I took a few hours to run my own financial projections, look at comparables, look at the neighborhood, and ultimately decided that I wanted to buy it. I emailed the office to reserve it, and they responded in 30 mins that the property was already taken.   Property #3- I opened the email immediately when I received it in a cab and the full deal packet was available. I did some light touch due dilligence while in the cab, and then 40 mins later I reopened the deal packet and saw that it was already taken.   In all three instances, properties were released and then reserved within a matter of hours (if not minutes!). How can anyone do due diligence to know what they are buying in that time? Have investors become so savvy that they know what 2-3 metrics matter and only focus on them? Or have investors lost their mind because they are so desperate for yield that they buy anything called “turnkey” and assume it’s a good deal?   I take this as a massively worrying sign and I’m tempted to stay on the sidelines until things cool down. Once we get a dip, then I’d be ready to pick up a bunch of places once the demand slows. Is anyone else noticing the same thing?

I agree with @Martin Maloney; trouble free tenents are worth their weight in gold. If you know you are slightly higher than market already and the tenants have given you zero problems, I'd give them a break on rent to keep them....turning over tenants is a huge hassle and its expensive. I wouldn't go below market, but I'd do whatever I could to keep good tenants in place and prevent turnover.  

Would love to attend if there is space (or if you make two tables). 

@Alex Kamunyo nice work! Thanks for sharing your story. 

If you don't mind sharing, were all of your partners financial partners? Or was there one partner local providing expertise/project management and the others financial?  Also, I have the same question that @Ryan Saldanha does, how did you split the profits with the partners?  

DM me if confidential ... I want to start partnering more and I am curious about different constructs. Thanks! 

I only have 2 properties and I was using Excel to manage them. I manually entered 9 months of income/expense info into Stessa and even connected my mortgage bank to my Stessa account. After all that work I was somewhat underwhelmed. Sure Stessa had pretty charts and graphs, but I found the reporting functionally really frustrating. They were great at proformas, but their YTD P&L only went to NOI and I couldn't add the mortgage payment in to see a visual of what my actual monthly cash return was. Perhaps its user error on my part (but I doubt it!). Maybe if all of your income/expense info was linked it would be super helpful to automate your life, but I'm sticking with Excel for now.

@Clayton Mobley thanks for your comment. I agree that the BP community has given me good advice! I'm not 100% sold on this property so I am going to pass on it, but to the TK's credit, they are willing to get the structural report and are not pushing a quick close. 

@Laura Williams thanks for sharing your experience.... sounds expensive! Given that I would be buying this property turnkey, I would never complete the sale if I had to pay for it! Any issues since you had the beams installed? 

The house is in Independence (not Waldo) but I've heard from someone else that many houses in KC have this issue. I don't know how true that is, but I guess it's something to keep in mind. 

@Jorlan Shinkle thanks so much for your reply! Super helpful. I knew it could be a potentially huge / expensive repair (to be done correctly). That's why I decided today to pass on the property as I definitely don't want to buy a turnkey property with known issues as that defeats the purpose! Yours and other BP members responses led me to this conclusion and I feel comfortable with it. The beauty of turnkey is that there will always be another property next week! Thanks again

@Warren A. good to hear from you! Thanks for sharing your experience in LR. I have no idea if my property has a slab foundation, but the cracks are in the basement and the inspector called it a major item. My TK did a similar 'filling' of the cracks as a solution, but the inspector recommended an expert opinion. In looking at the pictures, there are actually cracks on at least 3 walls which is a little more concerning.  They've offered to add a "Repair Under Consideration" to the contract, which I am considering, only if they agree to all of the recommended repairs! 

Property is in Kansas City btw. 

@Lynnette E. @Michelle Santhanam Thanks so much for your replies, giving me a realistic idea of what needs to happen to give it a proper repair. If the TK is willing to make the required repairs, then I will continue to pursue it. They have been very accommodating to my requests thus far and are not pushing a quick sale. 

@Matt K. thanks for the perspective. I agree that it might be worth it just to pass, but they have been very reasonable and not pushy so far. I also agree on choosing the inspector and agreeing to terms up front.