Rental Property Investor · Pomona, CA · Member since 2021 · 20 posts · 38 votes
Hi there, My name is Austin I’m new to the Bigger Pockets world and I’m looking to buy my first property this year within the next 6 months if possible. I’m 23 years old I’ve been saving money for a property since I was 17. I live in Southern California where the market is extremely saturated, prices are high, and cash flow is extremely difficult. I have enough money to get something out here but the numbers make more sense out of state and there are more cash flow properties in places like Florida,
Missouri, Ohio, and Alabama etc. So I’ve come to the conclusion that It would be the smartest move to buy a property in another state and continue to live here in California. My question is in regards to the service that Bigger Pockets always promotes on every podcast, Rent to Retirement. So I understand they are turnkey properties and I recently just learned what that means, but I started doing my research on new construction homes in Florida and I really like them I found a good price and it says it would cash flow $359/month or $4,308/annually. I found this to be amazing and I have my sights locked on this property, but then I was on YouTube yesterday on the Bigger Pockets channel looking for a video where they went more in depth over this service. I didn’t find that, but I did find a video basically going over the risks and dangers of getting into turn key real estate. Now I am in no way questioning the integrity of Bigger Pockets, but I’m new into real estate and I’m trying to educate and make informed decisions. So my question is Is Rent To Retirement a smart investment? Or Should I buy a piece of property on my own terms and renovate it and all that? Are they a legit service? Are there hidden fees? Should a turnkey be my first buy? What are the PROS & CONS of using this service? Also am I in charge of getting tenants or do they do that as well? In the video Brandon was saying you can’t trust turnkey companies numbers and I sat down and crunch the numbers and it all came together. I guess all I’m asking for is some guidance. I’m really excited to jump head first into real estate and take it head on but I just don’t want to make a move with a lack of understanding of this specific service. Any help or guidance would be greatly appreciated
Yes, we are a legit service. I'm not sure what you mean by this, or what videos you are referring to by our team, or by any others. We have hundreds of positive reviews from clients that have worked with us if you do some research on this site, and we've helped hundreds of investors build very successful rental portfolios for many years. I've included some links for you below that show some of this discussion on the forums already that would be good to reach through. @Joseph Schweizer can you provide some insight here.
We do have FL new builds that are available, and probably one of the best TK investments for a newbie by going with a new build. Whether or not going TK for your first property is completely a decision you need to make based on your investments goals, experience level, resources available, time you want to be involved, areas you want to invest in, etc.
The most successful investors invest in the markets where they can get the best returns, and should be diversified across multiple markets. Regardless of where you invest it is essential that you have the right team to assist you in building a successful portfolio. It doesn't really matter if you start locally, or not. The main point is that you get started. If your local market is so expensive that it will take you years to save up for a downpayment then I would highly encourage you to look at a market you can invest in sooner. If it takes you multiple years to save up money to invest those are valuable years lost of cash flow, tax benefits/depreciation, appreciation & debt reduction by the tenant paying the loan down. It's also years lost of education, which is the most valuable resource to help you be successful long term. If you truly want to invest locally, but don't have the capital to then use real estate investing out of state to help you build equity over time & save up your cash flow to invest locally. Just my two cents on the matter. We look forward to connecting with you!
Realtor · Austin, TX · Member since 2018 · 154 posts · 82 votes
5y
How much money do you need to retire? I think that's the first thing you should decide.
The second thing I think you should decide is how you want to get there? You CAN cash flow with turnkey properties, otherwise there wouldn't be turnkey companies. However, there are pros and cons to each. I don't really know them, but I'm sure the BP community will come help you out with that pretty soon here.
I would also focus on small multi-family to get to retirement. They scale a lot better, can increase in equity and cash flow pretty easily, and then you can get into another one. SFH are just not very fun IMO, but these are all your personal investments, so they should fit you personally.
Recap of questions you should answer:
How much money do you want to retire?
How do you want to obtain that money? (Stocks, Real Estate, Interest on loans, small business, etc)
How passive do you want your income to be?
How can you get it to be that passive?
EX: If you want 10,000 Dollars per month exclusively from real estate and SFH in Pomona, CA in Passive Income that only requires you to look at your mobile banking and see it deposited, you're going to have to build systems around whatever your passive income is. Property managers, maintenance people etc...
Yes, we are a legit service. I'm not sure what you mean by this, or what videos you are referring to by our team, or by any others. We have hundreds of positive reviews from clients that have worked with us if you do some research on this site, and we've helped hundreds of investors build very successful rental portfolios for many years. I've included some links for you below that show some of this discussion on the forums already that would be good to reach through. @Joseph Schweizer can you provide some insight here.
We do have FL new builds that are available, and probably one of the best TK investments for a newbie by going with a new build. Whether or not going TK for your first property is completely a decision you need to make based on your investments goals, experience level, resources available, time you want to be involved, areas you want to invest in, etc.
The most successful investors invest in the markets where they can get the best returns, and should be diversified across multiple markets. Regardless of where you invest it is essential that you have the right team to assist you in building a successful portfolio. It doesn't really matter if you start locally, or not. The main point is that you get started. If your local market is so expensive that it will take you years to save up for a downpayment then I would highly encourage you to look at a market you can invest in sooner. If it takes you multiple years to save up money to invest those are valuable years lost of cash flow, tax benefits/depreciation, appreciation & debt reduction by the tenant paying the loan down. It's also years lost of education, which is the most valuable resource to help you be successful long term. If you truly want to invest locally, but don't have the capital to then use real estate investing out of state to help you build equity over time & save up your cash flow to invest locally. Just my two cents on the matter. We look forward to connecting with you!
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
5y
@Austin Shade
The Midwest and Ohio in particular is a great place to invest to achieve higher returns than out west. If you’re paying high rent in California now it also could be smart to get a low 1-5% down 1-2 unit in California and start eliminating rent you could then use those savings to buy homes in the Midwest. Columbus, OH is a great market to be in!
Rental Property Investor · Pomona, CA · Member since 2021 · 20 posts · 38 votes
5y
@Zach Lemaster
Hi Zach, I recognize your name you are the guy in charge of Rent To Retirement, I meant no disrespect by my message I just wanted to get more information on something I had a lack of understanding of. The video in question that made me confused is linked down below in this comment. The reason I was confused was that Brandon Turner talks about your service every podcast and when I saw this I wasn’t sure if he was referring to all turnkey companies or not. All that aside, I really like your website and I think this is an amazing service that can really help me out tremendously, but that’s just it; It seemed so amazing that usually when something is to good to be true it usually is. I just know it’s bad to read about something, get all excited and super attached without stepping back and making an informed an educated decision especially when it’s as big as buying your first property.
Thank you for clarifying. In the video you are referring to Brandon simply talks about when turnkey makes sense for investors, and when it may not, and he also encourages you to run your own numbers instead of simply trusting numbers provided to you by the seller. This would be true of ALL investment opportunities TK or otherwise. I would encourage you to do the same, but also ask about why certain numbers are listed in a pro forma to add some insight. It is important to know why input data is used, and it's a red flag if there is no justification. If you have questions about what our company does, or how investor's experiences have been I encourage you to read through some of the threads I posted to give you a better idea of the value we provide to investors. I think you will find out very quickly we dedicate a lot of time to set our clients up for success, and develop long term partnerships with them. The next step would be scheduling an initial call with us to answer all your questions in great detail as that is the best way to find out specific answers to your questions to see if this is a route of investing that is compatible with your goals. We look forward to connecting with you in the near future!
Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
5y
Investing with turnkey providers can be valuable since it reduces the risks involved with REI. Im my opinion it does take away a lot of the value since you can do that on your own and make your own connections but it all depends on how hands-on the investor wants to be. If you are looking for oos investments in Ohio, I would check out Columbus. @Austin Shade
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
5y
Just to put some clarification in here, Austin... the questions you're asking are really a mix of different questions. If I'm understanding right, you're first asking about the turnkey strategy as a whole, and whether you should do that or do a property yourself. For help on that question, check out this article-
Then there's a clarification about different kinds of turnkey companies, because who is who matters for understanding who/what to do your due diligence on. You said "is Rent to Retirement" a smart investment? That again goes to the previous question... you're actually asking if turnkeys are a smart investment... but then if you decide to pursue turnkeys, you need to understand the difference between a direct turnkey provider and a turnkey marketing company. RtoR is a marketing company, as are many good companies, so they aren't the one who is directly selling you the property. They're merely connecting you with the company (direct provider) who does. That simply matters so you know where to direct your due diligence focus. Yes, research RtoR and learn about them and see if you want to work with them, but they aren't the one selling you the property, so don't stop your due diligence there.
Yes, absolutely run your own numbers. You should always verify everything for yourself and don't take anyone's word for anything.
As far as whether turnkeys are a good strategy or not... I've been buying turnkeys since 2011 (not through Rent to Retirement) and I wouldn't choose any other strategy! They aren't perfect, nor is any strategy, but they fit for exactly how I like to do things.
Hope that helps. The biggest thing is--separate out the questions you're asking into their specific categories so you can better and more easily figure it all out.
Thanks for the input on the thread. Lots of good info for Austin here. To clarify your comment though, we both market and directly sell turnkey properties that we 100% own and control. Last year we did over 60 homes internally across 3 different markets. We also own many vacant lots, and are partnered with a builder to offer many new BTR homes in FL. I wanted to add context here as we do operate as a direct provider. I've had Phil at Maverick reach out previously to sell some of our personal KC stuff, but the numbers didn't make sense for us to sell through them. I did have them sell some Chicago stuff for me though back in the day in 2014. I know Maverick is your referral source for most turnkey investments. Maybe we should start the discussion about us working together? Excellent blog by the way. I think that does a very good job outlining the risks of an investor taking on the brrr method on their own.
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
5y
@Austin Shade - I am not a TK provider but I have interviewed people who have bought TK, and did follow ups with them years later. Most were CA buyers who bought out of state. I think TK can be a good investment, if you are working with the right company. (FYI I know nothing about this particular company) Some companies do a very good job "selling" you so you have to be cautious and you are right to post here for people's personal experiences. Here is my advice:
Visit the market. You cannot understand the specifics of a market from half way across the country based on pictures. You need to see the neighborhood, what kind of cars people drive, is the neighborhood kept up, what the schools are like. The #1 regret from people I interviewed was not visiting the market and understanding what they were buying. These properties look great in pictures, but if it is a C/D class area you are going to have problems finding quality tenants.
Hire your own inspector, do not rely only on theirs. It is not worth a few hundred bucks savings to not have an independent third party opinion. Post on BP and get a recommendation for your own
You can also post here and hire a local investor as a consultant to give you information on the area. It looks like there are 6 of these homes for rent in Cape Coral at $1695 - They can help you with vacancy rates and how well priced these are. I do like that the TK provider included vacancy and repairs, a lot of them tell you since it is a brand new property and is already rented it will never have expenses, and we all know that isn't true. If these are appropriate, only a local investor will be able to tell you
I do not like that they are running their numbers with a 10% down loan as your second home, I am pretty sure that is mortgage fraud and I would be cautious of anyone suggesting I commit a federal crime
I would also be cautious of any company that tells you you can only buy in cash with no appraisal. I would never consider a property without an appraisal and there have been many stories of people losing money because they did this
At the end of the day, there are reputable TK providers and there are scammers. Do your due diligence
Very good insight on all topics! Thanks for the input.
Just a clarification on the 10% down option. It is specifically stated very clearly that the buyer intends to occupy the home at least partially during the first year of ownership. Anyone electing to do this option would have to use the property in this manner, and would have to sign a disclosure with the mortgage company verifying that. Cape Coral is an excellent location to live, to vacation & to invest in! There is a 20% down evaluation for someone who plans to use the property solely as an investment property. So no, we are not suggesting anyone commit mortgage fraud. Anyone is allowed to use a secondary mortgage for investment purposes, but there are regulations on how you use the home for both personal & investment use that is clearly outlined in the loan documents. We make that extremely clear, and it is up to the investor to make the most informed decision. All your other points are spot on!
Many people have responded and provided a lot of great information with regard to turnkey and RE investing in general. I won't add anything more along those lines. However, I purchased my first RE investment this past October 2020. It was a turnkey property in Kansas City and I worked with Zach and his team to obtain this property (see linked post). I chose turnkey for my first investment because I work full-time outside of real estate, I have no construction/rehab background, I wanted to invest out of state because of the price point (among other reasons), and I wanted to minimize my time and risk. If you have any specific questions for me regarding my experience, I would be happy to share more.
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
5y
@Zach Lemaster - good that you are disclosing. But from my experience with TK buyers never have intentions of living there and to err on the conservative side promoting a typically NOO loan would reduce any misconceptions
Rental Property Investor · Marion, IA · Member since 2016 · 150 posts · 74 votes
5y
@Brie Schmidt excellent points, especially the point about avoiding any TK provider that requires cash purchases and only their own appraisal. I came across one of those in Indianapolis when I was starting out.
Fortunately, I had enough knowledge to run my own analysis, and run comps.
Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
5y
@Austin Shade I was in a similar spot a couple years ago and now have STR's less than two hours from you that cash flow like crazy in Southern California.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
5y
@Austin Shade There's a lot to unpack in your post. First, congratulations on getting started at such a young age. By doing that, you will set yourself up well for retirement. How much it takes to retire depends on a lot of factors, but in general, financial planners use a rough rule of thumb called the 4% rule. The 4% rule says that once you retire, you can draw down 4% of your savings every year and not run out of money. This of course is a broad generalization. Saving enough for retirement, especially in CA is very hard. Let's say you manage to save $1M. Using the 4% rule, you would only be able to draw down $40K per year which isn't a lot to get by on in high cost of living markets.
As far as turn key properties, there is nothing inherently more risky about them than any other method of acquistion. As a matter of fact, as long as you are working with a reputable, well vetted turn key company, it is a far less risky method than buying a property on your own and fixing it up, especially if you're doing it from out of state. That is extremely hard and risky to do and beyond most inexperienced investors capabilities. I wrote a blog for Bigger Pockets on this topic which you can find here https://www.biggerpockets.com/...
Like in any business, there are good turn key companies and bad ones and the bad ones should not turn anyone off to the turn key concept. There are some bad real estate agents but that doesn't turn people off to buying real estate through an agent. It all comes down to who you are working with. Below are some key things to look for and avoid when evaluating a turn key company.
Don't allow financing or a finance contingency (it can be a good indication they are selling above market value)
Don't allow for your own independent property inspection
Are not realistic with their pro forma's (i.e. they don't include vacancy or maintenance projections or use unrealistically low vacancy factors)
Require you to pay for any renovation upfront
Sell only in cheap. low end neighborhoods
Don't accurately represent the neighborhood/property classification
Don't have consistent rehab standards for all properties
Thanks for the input on the thread. Lots of good info for Austin here. To clarify your comment though, we both market and directly sell turnkey properties that we 100% own and control. Last year we did over 60 homes internally across 3 different markets. We also own many vacant lots, and are partnered with a builder to offer many new BTR homes in FL. I wanted to add context here as we do operate as a direct provider. I've had Phil at Maverick reach out previously to sell some of our personal KC stuff, but the numbers didn't make sense for us to sell through them. I did have them sell some Chicago stuff for me though back in the day in 2014. I know Maverick is your referral source for most turnkey investments. Maybe we should start the discussion about us working together? Excellent blog by the way. I think that does a very good job outlining the risks of an investor taking on the brrr method on their own.
Thanks for the clarification! I'll be sure to relay that more accurately to folks who ask. Phil is long-gone from Maverick, and I don't just work with Maverick. Thanks for connecting... always good to meet more people that support the turnkey industry!
Investor · San Francisco, CA · Member since 2019 · 26 posts · 33 votes
5y
@Austin Shade - I know this is a couple months old, what did you decide about Florida? I'm in process of buying my first two rental properties, both through R2R, one in Florida. Here are some pros/cons/considerations:
The R2R properties in Cape Coral require a construction loan. This means that you won't get any ROI for around 6 months. And the extra cost of the construction loan might not be accurately represented in the pro forma. And the six month gap is not accounted for in the R2R pro forma. They say that it will appraise for much higher once completed, but that is yet to be determined in 6 months.
The property taxes in the Cape Coral might be higher than what the R2R pro-forma says. I have found that a lot of R2R properties have unrealistic numbers. If you put sale price of $238k in this estimator, the county estimates taxes of $3,098, and R2R says $1,890. So as already mentioned, run your own numbers.
R2R's bad pro formas don't necessarily stop me from investing through them, but you need to be skeptical and just use their pro forma as a starting point, not as truth. As feedback to @Zach Lemaster if he is reading, this is a big point of feedback, some pro formas I've seen are much worse than Florida.
Also their pro formas have assumed a 4% mortgage rate, but that's rounded up in Excel from 3.5%, which is huge. When I run the numbers, I can replicate their numbers only by using 3.5%. And currently rates have increased to at least 3.875%.
As Ali mentioned, R2R is more of a marketing company than a turnkey provider. I saw Zach clarified a bit that they do provide some properties directly, but that's a minority and not what you are looking at. The good part about this is that you get access to a lot more options. The bad part is that Zach/Scott will basically just pass you off to a local developer in Florida, and a local PM in Florida, for which there is no relationship history. We don't know yet if the local teams in Florida will perform well. Potentially this could become a good thing, because you have more people on your team.
Feel free to message directly me if you want to talk. I'm not super experienced yet, but sometimes its helpful to talk to a peer.
There is quite a bit here that we could spend a lot of time evaluating further & unpacking. I would like everyone to understand the perspective you are coming from in regards to your experience with us so far, which is somewhat in a limited capacity. Also, I welcome feedback. If you have feedback you would like to share with me I encourage you to simply call me to tell me directly.
I would like to add some things for perspective for other readers of your thread. It is important to note that you have only explored new construction with us, which is great because I think new construction is an outstanding option for a newer investor. So when you speak to our overall business model it is important to understand that you are really only speaking about the new construction in two markets, MN & FL. We have many properties we rehab internally along with many different asset classes to invest in. We have not worked on any of our traditional turnkey properties together in any markets besides the new builds. It is important to note that you are still very early in the process, so I think everyone would be quite interested to hear how your experience is post closing down the road so you can better speak to the overall process.
Most of your feedback is centered around the pro forma, and loan process. As you gain more experience you will come to find out you should always be running your own numbers based on your loan product, your lender and your personal financial situation. It is completely impossible to predict what interest rates are going to be on any given day, or for each specific person with various credit scores, DTI's, employment and different lenders involved with different loan options. We've seen many investment properties close at 3% over the past few months, and some in the mid to low 4s. It all depends. This is a moving target. There are many things that are likely over, or under projected in the numbers as real estate is a dynamic investment. Same thing applies to taxes. No one knows exactly where taxes will go, but you can project them based on what we've historically seen. With new builds taxes take a few years to be taxed at the full amount, and there are always options to lower tax rates like contesting taxes which we have been very successful with. Anytime you look at any pro forma for a property you must understand the entire purpose of a pro forma is to simply give you an initial starting point to evaluate a property. You must dive in deeper to evaluate each deal more thoroughly to see if the property does indeed make sense for you to proceed exactly like you have done. This would be true of any property you purchase regardless if it's with us or not. These deals must still seem attractive to you since you are proceeding. I personally purchase quite a bit of commercial assets every year (mainly as a tax approach when we run cost seg studies on the buildings). I will be the first to tell you the pro forma is only a starting point for any property, but that is what due diligence is for to further evaluate each property. I seldom spend more than 10min looking at a pro forma for those projects. A pro forma is simply a pro forma. There is no guarantee on those numbers with any property, and they are all subject to variance for each investor, each lender, each property, etc. There are no good, or bad pro formas, just pro formas that you always need to evaluate further.
When speaking about new builds, a construction loan is only one option of purchasing. This is not the only option so it’s important that all readers understand that. There are also multiple types of construction loans available. You also have the option of simply putting down a deposit on a completed home, or near completed home to not use a construction loan. In this scenario you would likely not have the immediate equity you would in a scenario where you do the construction loan since the property would sell close to market value. This is the exact process you are following with the MN new build you are purchasing with us.
It is very clear that you will not be receiving rent while a home is being built. That is not something to include in a pro forma. Hopefully you didn’t get the impression that this would ever be the case. In terms of values & appraisals we have many case studies to look at with current deals. All lenders, regardless of which loan option you choose to go with, will require an initial appraisal. We’ve seen many appraisals come back well above the price the investor is acquiring the asset for, and once the home is completed there should absolutely be more value in the home with rising land & construction costs. We’ve sent you many appraisals of other properties that have closed showing you this valuation.
I think the biggest thing I would like to clarify here the comment about “passing you off to people with no ongoing relationship.” This is simply not the case, and I truly don’t think it's fair of you to assume considering we haven’t closed any properties with you. There are many people involved in the process from contractors, managers, builders/developers. Everyone has their role that they play, and it’s important you spend time communicating with everyone like you have been. We spend a significant amount of time assisting clients in building a long term strategy to scale their portfolio over time, tax strategize, ensure clients are having a good experience with mngt, ensuring they have the most appropriate legal structure in place based on their goals, and focusing on creative ways of how to come up with capital to scale their portfolio over time. If anyone spends 10min on BP reading some of our reviews, or other threads from some of our experienced investors that have purchased with us for years this will be very evident. I know you have spoken to many of these past clients already. It is our goal to do everything we can to set our clients up for success, but most importantly to become an educated investor which the only way to really gain first hand knowledge is by investing.
I do commend you on being a person that is taking action! Many people never get past that first step! I hope you feel like you have already learned a lot, and that we have helped you in that process. I kind of feel like this post is mainly negative, which is constructive, but I would challenge you to spend some time saying a few positive things about how we’ve been of assistance to you. We’ve spoken over the phone, and I know Scott has had probably 20+ calls with you over the past few months. I know that he has really worked hard to do whatever he can to answer your questions, be available to discuss any topics you would like to over calls. Any credit for the time we’ve put in? Once you get these first few underway there are many high level topics we can work on together to help you scale over time. It’s motivating for us to spend the time to do that when we know our efforts are realized & appreciated.
Feel free to set up a call with me if you have more feedback. You have access to my calendar link that you can schedule at any point in time. I’m having a baby in the next few weeks, just fair warning, so sometime before May will be more open on my schedule.
Investor · San Francisco, CA · Member since 2019 · 26 posts · 33 votes
5y
@Zach Lemaster - Thanks for the response. I'm sorry if my comment was too negative. Overall I agree with you. Despite some of my critical feedback, many R2R offerings are attractive. I've had many calls with Scott and appreciate his patience in answering all my detailed questions. I hope to continue to work together.
1. My experience with may R2R be limited, but I happen to be buying in the same area that @Austin Shade was looking, which is why I focused on that and wanted to share my experience so far in that specific area.
2. I don't expect the pro forma to forecast an accurate interest rate. I know it varies. But I do think that rounding a 3.5% interest rate to 4% is misleading, because it makes it seem profitable even at a higher interest rate. Meaning that the pro forma displays 4%, but in reality the ROI is calculating with 3.5% interest. It might be that your admin team just needs to update the Excel sheet to display more decimal points. I've given this feedback to Scott before.
3. I know you offer multiple options for new builds and aged properties in different areas, but in Florida, which Austin asked about, it's available only with a construction loan. Correct me if I'm wrong.
4. I think it's fine if the Florida pro forma doesn't take into account the 6 month construction period, as long as the investor understands the opportunity cost of what that money could have been used for during that 6 month period. I don't think R2R is misleading at all on this, just wanted to help Austin weigh considerations of different purchases.
5. I did not say that R2R passes you off to someone without an ongoing relationship, I said there is no relationship history. I know that you are planning to have an ongoing relationship with developers and builders in Cape Coral, but thought it would be fair for Austin to know that the relationships are new. To my knowledge, there are not any completed properties yet in Florida with the developer and PM that R2R uses. Not necessarily a bad thing, I just think it's fair to understand the history and structure of all the players. I guess that's also why R2R has not been able to give me any referrals for customers in Florida.
6. I don't expect the property taxes on the pro forma to be perfect, I know that it varies. But I think R2R can do better. For both FL and MN, the estimate significantly off. In FL, it's not enough to kill the deal. In MN, I called the county tax assessor personally, and he is familiar with the property being built, and his estimate is more than double the R2R estimate, and that will probably kill the deal.
7. I have not been sent any appraisals for properties in FL, I will email Scott now to ask for that.
Investor · San Francisco, CA · Member since 2019 · 26 posts · 33 votes
5y
@Austin Shade - I just wanted to follow up again, I hope my previous comments didn't come across too negative towards R2R, because overall my experience with R2R is positive, and I would definitely recommend working with them. The main thing is just to use the pro forma as a starting point, and run your own numbers. You can download the rental calculator from the R2R website.
Like you, I live in California, where it's very difficult to be profitable on a rental property, due to such high purchase prices compared to rent. It's possible in some California towns, but overall very hard.
As a new investor, it's extremely difficult to invest long distance. It's hard to know which cities/neighborhoods are good - and when I say good, there are many factors, such as price/rent ratio, long-term potential, crime, etc. And even if you know a good area, it's hard to find the right properties. And even if you find a good property, there are likely tons of other people making offers. With R2R, they pretty much take care of all of that for you. They have already pre-researched good areas to target. When you want to choose a property, you basically just email them to reserve it, and you don't have to worry about a bidding war.
Since R2R is both a provider and a marketing company, it means that you have a lot of choices across many states. You can choose to diversify across different areas, or purchase in just one area. You can look for single family homes, duplexes, twin homes, 2 bedroom, 3 bedroom, 4 bedroom, etc. They have stuff under 100k, over 200k, etc. New construction, existing homes, etc.
Both @Zach Lemaster and @Scott Lundgren have Calendly links where you can schedule time with them. But I've worked with Scott closely enough that I can text and call him directly. I'm a very particular and detail-oriented person, and Scott has been really patient to answer all my questions. For questions he doesn't know the answer to, he puts me in touch with the right person. Especially once you show you are serious about buying a property, R2R is very responsive and make themselves available to talk.
Once you "commit" or "reserve" a property, R2R will ask for a deposit, and then they give you plenty of time for due diligence. If for some reason you decide to back out, they are really flexible, so you can feel comfortable working with them on that.
Thank you for mentioning some of value that we try to provide to our clients! This really does help us to know our efforts are appreciated. We look forward to working with you on these initial properties, and many more in the future!
