All Forum Posts by: Jesse S.

@Daniel Cullen thanks so much for your reply. Given your experience, I appreciate your perspective! I can't tell from the pictures how much (if at all) the wall is bowing in, but I am going to get it checked out. 

The turnkey construction manager said "they are settlement cracks with no lateral movement" I am going to get it checked out regardless.  

@Jason D. @Grant Rothenburger Thanks for your input, very helpful. My gut was saying better safe than sorry as well. I'll get it checked out. Thanks again! 

I got the inspection report for a turnkey property I am considering buying. There was one item listed in the 'Major Item' section. See language below along with pictures:

"Horizontal cracking on East side of basement. This type of movement indicates wall is being pushed

in by soil pressure. Repairs made, but incomplete and unreliable. This is still a structural concern.

Recommend hiring professional structural engineer to evaluate and advise to avoid continued

movement and possible structural damages to home. None visible during time of inspection."

The TK provider's perspective is that they fixed the cracks, but they also recommend a structural engineer take a look. Should I get it checked out before putting it under contract? I know this is not uncommon, but I dont want any potential return wiped out because of a major foundational issue in a few years. Has this come up with anyone before? What would you do? I can't believe I am the first person to encounter this with a TK property.... 

I got the inspection report for a turnkey property I am considering buying. There was one item listed in the 'Major Item' section. See language below along with pictures:

"Horizontal cracking on East side of basement. This type of movement indicates wall is being pushed

in by soil pressure. Repairs made, but incomplete and unreliable. This is still a structural concern.

Recommend hiring professional structural engineer to evaluate and advise to avoid continued

movement and possible structural damages to home. None visible during time of inspection."

The TK provider's perspective is that they fixed the cracks, but they also recommend a structural engineer take a look. Should I get it checked out before putting it under contract? I know this is not uncommon, but I dont want any potential return wiped out because of a major foundational issue in a few years. Has this come up with anyone before? What would you do? I can't believe I am the first person to encounter this with a TK property.... 

@Joel Fine excellent question! I've spoken with a lot of different turnkey companies and it annoys me so much that they never include placement or renewal fees in their pro-formas (not that you should trust their pro-formas anyway). I think on average over time it will probably be closer to 15% like you have calculated, but in reality, its going to be lumpy.... a $1,000 placement fee could wipe out half of your return for the year! 

For my projections (to be conservative) I'll assume an 18 month lease with two different PM lines. The first line I have the standard 8% PM fee, and on the second line, I'll do a placement fee in year 1, a renewal fee in year 2, and then a placement fee in year 3, etc. That may very well equal 15% on an annual basis, but for me it helps to think about them separately as the 8% should be constant, but the second line will be variable. 

For my homes in Memphis, I'm paying 8% PM fee, 75% of one month rent for tenant placement, and $150 renewal fee. I also have an optional 2x/ year property inspection for $80 (I've chosen to get it done once a year). This is not the cheapest I found in Memphis, nor is it the most expensive. It's in the middle. 

Finally, I had a rough start to my first two turnkey purchases. I've learned the hard way to value of a good PM and I have no desire to independently manage them remotely. A great PM is worth their commission, but a bad one will drive you crazy (and cause you to lose money).   

I echo what others said...be thankful that she is voluntarily leaving and you don't have to go through the eviction process and deal with months of lost rent and legal fees. Let her go and start finding a new tenant. 

I'm working on my 2nd eviction in 3 months and believe me... it ain't fun! 

I house hacked a duplex for my first RE investment. 90% of the time it was great, but the 10% of the time when something came up it was a big annoyance. I also was close to filing eviction papers with the court for one of my tenants and I had NO IDEA what I was doing; I certainly would have appreciated a PM when it came to evictions. 

I learned a ton through that process so I'm glad I did it myself, but I'm also glad to have a PM now. I work a lot and have small kids so I'm happy to pay 8-10% a month to have somebody manage my out of state SFRs. Initially you need to micro-mange your PM while you get used to each other, but once you sort each other out, it is a time saver. Thats not the right decision for everyone, but at this stage in my life its right for me. 

Good luck! 

I can't speak to the financing aspect, but your decision on rental vs flip might depend on the local Nashville market. I've got some friends and family in the area and from what I understand, its a pretty hot market at the moment. So if you are anchored on Nashville, it would depend on if you want to invest for cashflow vs appreciation vs a quick return with a flip, etc. 

Lots to think through, but I'd start with thinking about your local market and if your goals are primarily short term or long term in nature. 

Good luck! 

Thanks both! The landlord is going to take care of it, but its good to know my options if I needed to handle it myself. Appreciate the help! 

Hi all- full disclosure: this isn't about one of my investment properties, it's about where I am currently renting!

After moving in I noticed this gaping hole underneath the sink in my kitchen (see picture). Reason for the hole is to run the water line from the kitchen to the closet where the W/D hook-ups are. However, they clearly didn't seal up the hole in the kitchen when they were done. While we don't have any rodent/pest issues, this seems like a massive invitation for something to enter my apartment while crawling through the walls of my building. 

Any ideas on how to close the hole? I know I'm not responsible for it, but I'm a bit puzzled by the solution as the hole is large and there needs to be space for two pipes to fit through.  Help!