All Forum Posts by: Zachary Schimenz

Hey, I bought a property in Little Rock AR a few years ago, and now that home values have been skyrocketing the last few years I feel like I could get a good chunck of money out of a refinance.

I bought it turnkey so just went with the lender they recommended, how do you go about finding a lender, do you just start calling banks or is there a better way? Or if you have any recommendations on lenders you've had a good experience with in the past that would be amazing.

Thanks!

Awesome, thanks so much, I'll hit up Dave next time I'm going to buy a house

Remington - I'm looking for more of a passive investment, so no

Michael K - Yes, in Toledo. I'm not sure if I can get a new property manager or not, I'll have to look into it.

Michael P- $85,000 vs $29,000

I currently have 2 properties, one from REI Nation (used to be called Memphis Invest) and the other from Ohio Cash Flow. I'm super busy, so I was looking for a Turnkey property, something where I could passively invest to diversify my investments. I've had them over a year now, here's my experience:

REI Nation:
So far so good!! The property manager calls me every month, even if there's not an issue (which there hasn't been so far). Usually I don't end up picking up and they leave me a voicemail.

Tenants have always paid rent, no repairs needed so far, and they always get back to me on time. Their estimates on the costs were pretty close, and even though I'm making a modest profit (I was expecting that from a turnkey) they've been nothing but up front with me about everything.

Ohio Cash Flow:
Man, where do I start with these guys... it's been a nightmare.

On paper, the house looked like it was going to make WAY more money than the REI one. But they were obviously hugely inflating the numbers.

First off, you have to pay cash. I didn't realize why they wouldn't accept loans at first, but I do now - it's because the house you get is going to appraise WAY lower that the actual amount. I found this out when I tried to refinance. 

Of course, to some extent this is my fault for being a newbie and not knowing the numbers well enough, but they were definitely intentionally trying to rip me off.

Then, the property management has been awful. It took about 3 months to get the second tennant moved in. I've had a ton of repairs needed (even though *supposedly* this was a turnkey property with everything updated - at least that's what they told me). I've gotten charged for things that would've slipped by if I didn't check my statement every month. 

Almost every month I find some kind of extra charge, or missed rent payment on my statement and have to email them. Sometimes they respond, sometimes they don't and 4 days later I have to send the "did you get this?" email. I feel like they are hoping I just won't notice or will forget about it.

Bottom Line
Hands down go with REI Nation. Ohio Cash Flow will bait-and-switch you into a money drain

I'm currently refinancing an investment property that I originally bought cash to obtain a $70,000 30 year loan, and the closing costs come out to $5,054.

This seems a bit high as I've heard closing costs are typically 3% to 5%. Any thoughts??

I have a good credit score and the interest rate is 4.75%. Here are the main costs - can you let me know if anything looks way too high:

Loan Orignation fee: $1,400
Processing Fee: $395
Underwriting Fee: $895
Appraisal Fee: $450
Title Fees (a bunch of small ones that add up to): $1,685

Thanks - I appreciate the insight,

-Zach

Alright sounds good thanks!

And I'm just looking for properties as a hands-off investment (as a way to diversify from only the stock market), and the turnkey companies I researched that have a lot of good reviews, mostly have SFRs

Hey everyone! So here's my situation:

I'm going to be buying a house through a turnkey company, but they ONLY do cash offers, their houses are typically between $60k and $100k. The return is good, but would be much better if I could use leverage. So I'm wondering if I can do one of the following:

1. Am I able to buy cash and then refinance a house around $60k? I know typically banks won't give out mortgages for less than around 100k, does it work the same way with refinances? The house WOULD be fully renovated of course since it's turnkey, so it would be in good shape.

2. If the answer to #1 is "no", then can I buy two houses at $60k each, and "bundle" them together so the refinance would be on $120k total?

3. For each of these, would there typically be a higher than average interest rate since it's not a standard refinance?

4. Any recommendations of lenders who can do this?

Thanks so much, and let me know,

-Zach

Thank you guys for the feedback. Couple things:

1. For me, having a true turnkey experience is super important. My time is much better spent building my business where I know the market than spending that time scoping for real estate deals, dealing with property managers, etc. Memphis Invest has a reputation for being as hassle free as they get. Yes, I could make more money doing my own deal but the time commitment and learning curve isn't worth it to me.

2. I'm curious why everyone uses Cash-on-Cash as the basis for comparing to the stock market or mutual funds. Loan paydown and the Depreciation Tax Write Off are both guaranteed (as opposed to Appreciation which is likely but not guaranteed) and have a HUGE impact on ROI, so why don't most people take this into account?

3. At this point I've spent long enough "researching, reading, and analyzing" real estate. At the end of the day everyone has different opinions on estimates and I won't know the true numbers for my situation until I take the leap and actually see for myself. When I built my business there were plenty of times where I spent money trying things that ended up losing money. But I learned a lot each time and I believe by moving faster I made way more money in the long run by finding out what didn't work early on and then using that knowledge to find out what did work, instead of continuing to research.

So, long story short, I'm going to go through with the deal. Maybe it turns out great. Maybe it doesn't, I end up selling and losing some money, and I look for the next one. We'll let the future decide.

Hey y'all! So, I recently tried out my first home purchase with a company called Roofstock and had a terrible experience.

This is round number 2!! Going with a company called Memphis Invest. They have a TON of good reviews so I'm going with them mostly based off of that.

I wanted to start this thread to show you my actual numbers on the house I'm buying. With Roofstock I felt duped their numbers and the way they do business. There were a lot of numbers weren't just over-exaggerated, they weren't even close. Anyway, Memphis Invest seems to have a reputation for the opposite, being very conservative with their numbers so you know what you're getting.

So far the communication is great, but at the end of the day we'll have to see how the numbers pan out. So going to put the estimates they gave me now. 6 months from now I'll update the thread and let you know the actual numbers that went down to see the comparison. Then going to keep updating it year after year partly just for my own records, but hopefully it can help some of y'all too if you're thinking of investing with them.

Single Family Home in Little Rock, AR
3 bed, 2 bath - 1652 Sq Ft

Price: $149,900
Down Payment (20%): $29,980
Loan Amount (30 year): $119,920
Closing Costs (based on my estimates of 3.5%): $5,247

Monthly Numbers Estimates
Estimated Rent: $1,125
Mortgage (Based on lender's upper estimation of 4.85%): $635
Taxes: $123
Insurance: $44
Vacancy (4%): $45
Repairs (4%): $45
Property Management (10%): $113
First Month's Rent: $94

Total Monthly Revenue: $1,125
Total Monthly Expenses: $1,099
Total Monthly Profit: $26

So.. .couple things.

The house is fully rehabbed (new roof and everything), so that's why the low 4% repairs estimate.

For vacancy, 4% is also low, but according to Memphis Invest their average tenant stays on for 4 to 5 years, so if that's true, 4% is actually an overestimation.

This also doesn't account for depreciation savings on taxes, loan paydown, and appreciation of the house. Also, this is a completely turnkey property and fully managed, so I'm expecting less of a return than if I'd bought a house myself. I own my own business and my time is much better spent working on that than learning the ins and outs of real estate.

Anyway, I'll keep ya updated!

Ok gotcha, looks like it's pretty average. Thank you all!