All Forum Posts by: Willem Botha

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $255,000
Cash invested: $91,202

4 Bedroom, 2 Bathroom with Garage (New Build) - Purchased this one with a partner (50/50)

What made you interested in investing in this type of deal?

Excellent turnkey provider with new build inventory.

How did you find this deal and how did you negotiate it?

Doing ongoing research for years. Finding the "correct" turnkey provider is essential.
Listening to their podcast twice a week (Not your Average Inverter Show - JWB).
Made contact and "picked" a property.

How did you finance this deal?

JWB only allows their approved lenders. With effort and good communication from all parties involved everything was done remotely with me in South Africa.

How did you add value to the deal?

None / New Build

What was the outcome?

Excellent - Good turnkey provider is the ONLY way for me as a foreign investor to have peace of mind.

Lessons learned? Challenges?

Communication is key. This was my first deal with a 30 Year fixed mortgage and the paperwork was the biggest challenge. Having good records, bank history and reserve funds are all essential elements to successfully close the deal.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

JWB - All the parties involved are approved and recommended by them.

@Joe Maris my zip code "list" is build up from months (eventually years) of podcasts, forums, and "self" education. Once you "pick" your TK provider and by default the location you need to do A LOT of due diligence about the area - the nice thing is - once the area is identified you now have something specific to concentrate on and gather information.  I use crime stats / information from trulia.com - might not be the best but I only continue if the property is in a "lower" light blue crime area. Again, all these form part of a big picture to try and be as safe and prepared as possible.

@Joe Maris I do believe it is extremely important to have a TK provider that give an accurate and true reflection in the proforma. I can confirm that MSHB proforma matched the real cashflow with minimal difference. Keep in mind you need to look at and calculate vacancy / turnover and maintenance as well. Some TK include these costs and others don't. This is a long-term investment and the cashflow is merely a "bonus" in my opinion. We were incredibly lucky the past year or two regarding appreciation but can't (and I didn't) have any expectation for appreciation.
I have fine-tuned my criteria over months and have a few simple steps to do before committing to the deal (Remember this is AFTER you after 100% comfortable with you TK Provider) - I check my ZIP Code "Accepted" List, Crime Info, Confirm ROI / Cashflow is within my criteria - Initiate / commit.

@Brett D. Things are going great in Tennessee (Midsouth Homebuyers) is an excellent Turnkey Provider. I an on the list again and hope to get my next property with them before the end of the year. I also signed a contract with JWB (I was on a quest to buy new builds) and I must admit the ride is extremely smooth (early days). Fast communication and a great team to work with.

Thank you for the information and detail. Sorry you had to go through such an experience. I am a foreign investor and tried to buy from them as well and luckily got "fired" even before we got the first property under contract.

After multiple attempts to get a property under contract without success I decided it is time to move on.

The most disappointing was the fact that even after raising some concerns about lack of response and service with the owner (Leah) I never even received as much as a reply from her.

After several more attempts I voiced my concern about the response time from confirming my commitment to make an offer (at full asking price with loan pre-approval) and the day that passes before a reply OR a reply a day later that the property is no longer available.

Interestingly enough – when I complained about the lack of speedy response – I got a mail back within 15minutes explaining that they have hundreds of different investors, and they are not a typical one-on-one buyer’s agent.

The mail ended with a very polite “willingness” to help further but stated that we are probably not a good fit.

I got the hint and decided it was indeed time to move on.

Yes that is correct. 

@Sam Sala - Once you purchase you stipulate of you want to be added to the list for the "next round" - But I changed from inhouse finance (40% down / 10 Year bond) to Conventional Finance - There is a separate list for the different finance option you use. The initial 3 properties also took a while - roughly 6 to 8 months between them to reach the "top" of the list again. 

@Sam Sala Yes, things have changed and I had to re-evaluate and adapt. I am still buying Turnkey. Midsouth Home Buyers hat set the bar extremely high. There is a waiting list BUT you know exactly what you are in for, no twists and turns. I managed to get a 30 year mortgage pre-approval and therefore moved to another waiting list - I will start getting properties to choose from in the next 40 to 60 days. My target therefore moved up to above $130k. I only had one turn-over since I started inverting with Midsouth. I am very happy with the returns. ** These 3 properties are all on 10 Year bonds and therefore my "real" return will be once they are paid-off. They do cashflow every month and as they say "Equity happens"   

I have also signed a contract on another property in Texas from OmniKey.
(First one from them and very different price tag >$200k). 

Since I am thousands of miles away in a different time zone (South Africa) Turnkey is the best option for me. I also had my time self-managing etc. and the time has come for me to be less active. Turnkey is working for me and I will keep doing it with some adjustments as the time / markets dictate.

@Sam Sala Keep in mind this research was done during 2015-2017. Found them through Podcasts (I have Listened to every single Bigger Pockets Podcast) and a few others related to Property investments. At that stage Engelo already made it clear that he is "selecting" investors and Cashflow Savvy have a Podcast - "Epic Real Estate Investing"