Norada
Real Estate Agent · Santa Clarita · Member since 2015 · 57 posts · 11 votes
Norada
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Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes
8yMemphis Investment Properties Turnkey Case Study
Disclaimer: I am an investor/customer of M.I.P, I do not work for them nor being compensated in anyway, just sharing my experiences with other investors.
Providers Involved:
Norada Real Estate Investments
Memphis Investment Properties (M.I.P)
Reedy and Company Realtor, LLC – Real Estate Broker and Property Management for M.I.P
Bemortgage – Lender
Lipscomb – Insurance
The Prep:
- I originally came across M.I.P through Norada (Marco Santarelli, BP contributor and has his own podcast).
- I was assigned an advisor who gathered my goals and situation and we worked together to identify two markets to look at Memphis TN, and Birmingham, AL.
- I’m am an out of state investor living in Colorado and have two other properties in Texas (not turnkey) and have been a BP member for some time.
- I attended an investor Tour in May in Memphis to check out the area. It was hosted by M.I.P and we toured properties, meet lenders, insurance agencies, and other provider doing business with M.I.P
My Criteria/Situation:
- 100K Purchase price
- Good working-class B, B+ area
- 3/2/brick house
- Was looking for 1% rent to purchase ratio
- Conventional financing with 20-25% down payment
- Utilized 401K loan for down payment and closing costs
The Purchase:
During the M.I.P Property tour in May, they handed out flyers with properties for sale reserved for visitors that weekend. I put down $3K deposit on a house during the first day of the tour.
Below is the Performa and the initial picture of the house. Additional pictures, comps, and a list of renovations were provided, no costs, just items they would do. We had seen a similar house on the tours. M.I.P is willing to replace HVAC’s, roofs, windows, etc. when needed, but they will minimize the renovations based on the age of major items, etc.
This house needed a new HVAC/condenser, but the roof and floors were in average condition.
This house was set to be empty June 30, and close August 45 days later, this did not happen as planned.
Timeline of events:
- Property Tour May 17-19
- Deposit on May 18, 3K for $95K purchase
- May 21 Purchase Agreement signed electronically
- June 30, the house will be vacant (renovations start)
- Was notified in early July tenant would not leave
- July 17 house syndicated on Zillow, Realtor.com, Trulia etc. (pictures of current house pre-renovation listed along with a second house-MISTAKE)
- July 23, tenants move out and return keys
- Aug 31 First set of renovations complete, mostly cosmetic
- Through Sep I negotiated with Norada and M.I.P to improve the renovations, I was not satisfied with work nor scope, they agreed to all items and improved the unit through Sep while it was on the market.
- Sep 12 Appraisal came in for asking price of $95,000, cost $495
- Sep 18th Third Party Property Inspectors found items, M.I.P fixed all issues, Cost $295
- Sep 28th, closed on the property, no tenant yet
Closing:
- The closing was smooth, mobile notary came to my house
- All paperwork initially was signed via DocuSign, but ended up signing everything in front of the mobile notary at the end again
- Electronic copies were available post-closing
- No issues with wiring money, etc.
Post-Closing:
- Home is still empty, Reedy and Company Realtors, LLC is now the Property Management company
- Pictures of final renovations were provided after many inquiries
- House rent rate was lowered to $965 after sitting vacant all summer at $1065
- I was not sure why they raised the rent so high during the closing process. A friend of mine noted that some do that to actually discourage renters during the renovation process, so they can finish and have access. Others note that the marketing department wants to raise the rents for the benefit of all. I do not think this was a major strategy killer, but the house sat empty during peak rental time (Summer before school started) and is still vacant at a price above Proforma.
Some Observations:
- Closing costs came out to be much higher than the proforma estimate
- Taxes were spot on
- Property Mgmt. fee spot on
- The vacancy is listed at 4%, even though PM says I takes an average of 45 days to rent, so it’s a broad average I’m assuming after tenant leases or across all their properties.
- They advertise 2-year leases during the tour and most turnkeys are rented prior to closing, not the case for my property, still vacant
- One inquiry has come in for a family whose house burned down, but they want 3-month lease smack in the middle of winter for another renewal, not optimal
- Neither the marketing department nor PM inside Reedy was very proactive as far as communication. I had to get Norada involved too many times to push them to email me back. This is probably my major complaint as this is totally controllable. As an out of state investor all we can expect is communication since we are trusting the process 100%.
- The delay in closing was also probably controllable since it was their tenant to remove. This caused me a rise in interest rates and the second hit to my credit since it had to be pulled twice over the period of closing.
| Proforma Estimate | Actual | Notes | |
| Closing Costs | $2854 | $4086 | %43 higher than the estimate |
| Pre-Pays | $0 | $734 | I was told that M.I.P does not try to estimate pre-pays |
| Interest Rate | 5.25% | 5.375% | I put 25% down, the delay in closing caused me to obtain a higher interest rate |
| Property Taxes | $97 | $97 | Spot on (2017 records) |
| Insurance | $40 | $52 | I used Lipscpomb, M.I.P .recommendation |
| Vacancy | 4% (14.6 days a year) | Since tenant vacated 26% (95 days) | Since my ownership 5% (21 of the 95 days) |
Overall Summary:
Overall, I would recommend Norada and M.I.P. My experience was not perfect, but most items come with the territory in my mind. You must do your due diligence and expect delays.
My major complaint was lack of proactive communication. I work in the I.T. field were daily, weekly communication is the key to working in a remote environment. I have come to expect that from anyone who is in partnership around my investments. I did express my disappointment many times in lack of communication and it improved a bit after closing. I do not hold any one individual at fault, I believe its part of the system, they are overly busy and have to multi-task quite a bit. I think they should be upfront that you might not hear from them for days or weeks sometimes.
I would be more than happy to talk to any investor about my first Turnkey investment. I will most likely do this again because I'm not an expert in BRRRR, Wholesaling, or Fix and Flips. I need consistent CoC, Tax relief, and mortgage pay down, etc.
58 Replies
- Real Estate Coach · Austin, TX · Member since 2018 · 56 posts · 52 votes8y
@Mike D'Arrigo - Fair point and respect your questions. As an avid real estate investor and one with a background in finance, I can assure you I have measured the investments aforementioned in detail. Here is a summary:
1) Did I achieve the rents advertised? Yes
2) As of now no true vacancy however, single family homes do not average 5.0% as in most models. As you know when a SFH is vacant it usually is for 1 month or 1/12 or 8.3% not to mention the lease renewal fee which further drives down the ROI so again, the Norada model is not baking in all costs.
3) Over time I have seen their margins increase and their advertised ROIs contract. Now part of this is the fact that the general market is offering lowering ROIs in such secondary markets but part of it is their general greed for profits. I now source deals in Huntsville where they are at and I am yielding 14-18% Cash on cash with conventional financing yet they offer 10-12% at best.
4) Investment Advisors: When I was pursuing a fourplex thru them, and asking a few questions more than the typical investor, they stop returning my phone calls and stopped the deal. Additionally when a deal fell thru because the financials were not going to pan out as advertised, I never received my earnest money back.
So, hard to tell if you are another one of their sneaky investors or truly wanting to learn the details. Hopefully I provided the latter and if you are the former, please let Marco know his game is being discovered and the damage control will take more than a podcast.
Best,
TS
- 8yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
Originally posted by @Thomas Staub:
@Mike D'Arrigo - Fair point and respect your questions. As an avid real estate investor and one with a background in finance, I can assure you I have measured the investments aforementioned in detail. Here is a summary:
1) Did I achieve the rents advertised? Yes
2) As of now no true vacancy however, single family homes do not average 5.0% as in most models. As you know when a SFH is vacant it usually is for 1 month or 1/12 or 8.3% not to mention the lease renewal fee which further drives down the ROI so again, the Norada model is not baking in all costs.
3) Over time I have seen their margins increase and their advertised ROIs contract. Now part of this is the fact that the general market is offering lowering ROIs in such secondary markets but part of it is their general greed for profits. I now source deals in Huntsville where they are at and I am yielding 14-18% Cash on cash with conventional financing yet they offer 10-12% at best.
4) Investment Advisors: When I was pursuing a fourplex thru them, and asking a few questions more than the typical investor, they stop returning my phone calls and stopped the deal. Additionally when a deal fell thru because the financials were not going to pan out as advertised, I never received my earnest money back.
So, hard to tell if you are another one of their sneaky investors or truly wanting to learn the details. Hopefully I provided the latter and if you are the former, please let Marco know his game is being discovered and the damage control will take more than a podcast.
Best,
TS
Thomas, I'm not "one of their sneaky investors". They are a competitor, so I am not biased in their favor at all. I just felt a need to challenge some of your statements which I didn't think were entirely fair towards them. An example is in your reply here where you said "when a deal fell thru because the financials were not going to pan out as advertised, I never received my earnest money back". That's not totally surprising. Buyers are expected to do their due diligence up front and determine whether the numbers are going to "pan out" before entering in to a contract not after the fact. Legally, a buyer can't back out of a contract just because they changed their mind or didn't do all of their due diligence to begin with. Contingencies are typically for inspection and financing. I'm sure that Norada doesn't want to stop offering a property to their investors while a potential buyer does their due diligence. In all fairness to them, they were not legally obligated to return the earnest money deposit.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Thomas Staub:
I have experience with this group.
Strong Points: Coordination. They do have a smooth process down and are in several markets.
Downside: All of my properties are performing under 9% cash on cash ROI.... This backs out vacancy. If you factor vacancy allowance I'm barely hitting 7% ROIs. They mark up their properties way too high. Their investment advisors are a bit sneaky too as I had a bad experience in Huntsville. Marco is polished but it is becoming more clear they are simply trying to squeeze every last penny out of a deal. I am not having a hard time selling these underperforming properties as I need to hold them for 3+ years to make up for the closing costs. Overall I wish I hadn't invested with them.
this should not be a shocker... 5 to 7% is norm for rentals in todays market and anything higher is gravy... and no way anyone buys in the mid west and has to exit in less than 5 years without a capital loss.. If you paid market for the property and it does not matter who you bought it from.. if you want better deals. you need to do your own direct marketing buy them before the wholesalers get them then the wholesaler sell to the turn key contractors then they do their thing there has to be financing cost in there.. then there is sales load.. non of this is a mystery.. its still amazing that they can do all this and still bring product to market and your making 5 to 7% I call that a homerun.
- Real Estate Coach · Austin, TX · Member since 2018 · 56 posts · 52 votes8y
@Jay Hinrichs - I agree, rental ROIs have come down substantially and in primary markets you're lucky to yield any ROI. Secondary markets such as Indy do typically yield lower than 10% ROIs if you take a look at most turnkey providers. You're absolutely right in that sourcing your own deals will yield much better ROIs but isn't that part of the value prop of a turnkey company? Healthy deals with no headaches? I can easily find deals in many markets on the MLS and rent them if I only wanted 5% to 7%.
I do know a few turnkey companies, which I cannot mention here, that offer 12% as a floor for B class or they will not offer them to the their investors. As I mentioned in an earlier post, Norada has a streamlined operation, they make the process smooth and yes, Marco seems like a solid guy. I can also say the property management team they introduced to is solid. However I'd expect they'd take less from the deal and I have intel on what they are making and for a marketing company it's high. If that fee were to come down, I'd have a product that would yield 10%+. It simply seems that the flipper and Norada are making all of the money and not the buyer and that is exactly why I now source my own deals.
Appreciate the dialogue @Jay Hinrichs @Mike D'Arrigo
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Thomas Staub:
@Jay Hinrichs - I agree, rental ROIs have come down substantially and in primary markets you're lucky to yield any ROI. Secondary markets such as Indy do typically yield lower than 10% ROIs if you take a look at most turnkey providers. You're absolutely right in that sourcing your own deals will yield much better ROIs but isn't that part of the value prop of a turnkey company? Healthy deals with no headaches? I can easily find deals in many markets on the MLS and rent them if I only wanted 5% to 7%.
I do know a few turnkey companies, which I cannot mention here, that offer 12% as a floor for B class or they will not offer them to the their investors. As I mentioned in an earlier post, Norada has a streamlined operation, they make the process smooth and yes, Marco seems like a solid guy. I can also say the property management team they introduced to is solid. However I'd expect they'd take less from the deal and I have intel on what they are making and for a marketing company it's high. If that fee were to come down, I'd have a product that would yield 10%+. It simply seems that the flipper and Norada are making all of the money and not the buyer and that is exactly why I now source my own deals.
Appreciate the dialogue @Jay Hinrichs @Mike D'Arrigo
fees for turn key west coast marketers have come down by the way.. back in the day a lot of those companies were charging 10k per deal or higher.. now 6k is standard.. or 10% sometimes .. the guys in Australia were brutal on fees .. when they took their share and split it with the west coast marketer.. even if a property says 12% pretty tough to really get that over time all the folks buying SFR's until they get to 10 years they will never know their true IRR.. new roofs new mechanicals etc etc. not to mention one bad tenant and your right about turn over costing at least a month of rent plus a re lease fee.. none of that is backed into these returns. that's why I say 12% is really 5 to 7%
- 8yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Thomas Staub prices and ROI depend on the quality and level of renovation. When you're seeing higher than average COC returns, it could mean that the property has a lower level of rehab. Ask for a scope of work and compare the rehabs.
- Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes8y
Memphis Investment Properties Turnkey Case Study
Disclaimer: I am an investor/customer of M.I.P, I do not work for them nor being compensated in anyway, just sharing my experiences with other investors.
Providers Involved:
Norada Real Estate Investments
Memphis Investment Properties (M.I.P)
Reedy and Company Realtor, LLC – Real Estate Broker and Property Management for M.I.P
Bemortgage – Lender
Lipscomb – Insurance
The Prep:
- I originally came across M.I.P through Norada (Marco Santarelli, BP contributor and has his own podcast).
- I was assigned an advisor who gathered my goals and situation and we worked together to identify two markets to look at Memphis TN, and Birmingham, AL.
- I’m am an out of state investor living in Colorado and have two other properties in Texas (not turnkey) and have been a BP member for some time.
- I attended an investor Tour in May in Memphis to check out the area. It was hosted by M.I.P and we toured properties, meet lenders, insurance agencies, and other provider doing business with M.I.P
My Criteria/Situation:
- 100K Purchase price
- Good working-class B, B+ area
- 3/2/brick house
- Was looking for 1% rent to purchase ratio
- Conventional financing with 20-25% down payment
- Utilized 401K loan for down payment and closing costs
The Purchase:
During the M.I.P Property tour in May, they handed out flyers with properties for sale reserved for visitors that weekend. I put down $3K deposit on a house during the first day of the tour.
Below is the Performa and the initial picture of the house. Additional pictures, comps, and a list of renovations were provided, no costs, just items they would do. We had seen a similar house on the tours. M.I.P is willing to replace HVAC’s, roofs, windows, etc. when needed, but they will minimize the renovations based on the age of major items, etc.
This house needed a new HVAC/condenser, but the roof and floors were in average condition.
This house was set to be empty June 30, and close August 45 days later, this did not happen as planned.
Timeline of events:
- Property Tour May 17-19
- Deposit on May 18, 3K for $95K purchase
- May 21 Purchase Agreement signed electronically
- June 30, the house will be vacant (renovations start)
- Was notified in early July tenant would not leave
- July 17 house syndicated on Zillow, Realtor.com, Trulia etc. (pictures of current house pre-renovation listed along with a second house-MISTAKE)
- July 23, tenants move out and return keys
- Aug 31 First set of renovations complete, mostly cosmetic
- Through Sep I negotiated with Norada and M.I.P to improve the renovations, I was not satisfied with work nor scope, they agreed to all items and improved the unit through Sep while it was on the market.
- Sep 12 Appraisal came in for asking price of $95,000, cost $495
- Sep 18th Third Party Property Inspectors found items, M.I.P fixed all issues, Cost $295
- Sep 28th, closed on the property, no tenant yet
Closing:
- The closing was smooth, mobile notary came to my house
- All paperwork initially was signed via DocuSign, but ended up signing everything in front of the mobile notary at the end again
- Electronic copies were available post-closing
- No issues with wiring money, etc.
Post-Closing:
- Home is still empty, Reedy and Company Realtors, LLC is now the Property Management company
- Pictures of final renovations were provided after many inquiries
- House rent rate was lowered to $965 after sitting vacant all summer at $1065
- I was not sure why they raised the rent so high during the closing process. A friend of mine noted that some do that to actually discourage renters during the renovation process, so they can finish and have access. Others note that the marketing department wants to raise the rents for the benefit of all. I do not think this was a major strategy killer, but the house sat empty during peak rental time (Summer before school started) and is still vacant at a price above Proforma.
Some Observations:
- Closing costs came out to be much higher than the proforma estimate
- Taxes were spot on
- Property Mgmt. fee spot on
- The vacancy is listed at 4%, even though PM says I takes an average of 45 days to rent, so it’s a broad average I’m assuming after tenant leases or across all their properties.
- They advertise 2-year leases during the tour and most turnkeys are rented prior to closing, not the case for my property, still vacant
- One inquiry has come in for a family whose house burned down, but they want 3-month lease smack in the middle of winter for another renewal, not optimal
- Neither the marketing department nor PM inside Reedy was very proactive as far as communication. I had to get Norada involved too many times to push them to email me back. This is probably my major complaint as this is totally controllable. As an out of state investor all we can expect is communication since we are trusting the process 100%.
- The delay in closing was also probably controllable since it was their tenant to remove. This caused me a rise in interest rates and the second hit to my credit since it had to be pulled twice over the period of closing.
Proforma Estimate Actual Notes Closing Costs $2854 $4086 %43 higher than the estimate Pre-Pays $0 $734 I was told that M.I.P does not try to estimate pre-pays Interest Rate 5.25% 5.375% I put 25% down, the delay in closing caused me to obtain a higher interest rate Property Taxes $97 $97 Spot on (2017 records) Insurance $40 $52 I used Lipscpomb, M.I.P .recommendation Vacancy 4% (14.6 days a year) Since tenant vacated 26% (95 days) Since my ownership 5% (21 of the 95 days) Overall Summary:
Overall, I would recommend Norada and M.I.P. My experience was not perfect, but most items come with the territory in my mind. You must do your due diligence and expect delays.
My major complaint was lack of proactive communication. I work in the I.T. field were daily, weekly communication is the key to working in a remote environment. I have come to expect that from anyone who is in partnership around my investments. I did express my disappointment many times in lack of communication and it improved a bit after closing. I do not hold any one individual at fault, I believe its part of the system, they are overly busy and have to multi-task quite a bit. I think they should be upfront that you might not hear from them for days or weeks sometimes.
I would be more than happy to talk to any investor about my first Turnkey investment. I will most likely do this again because I'm not an expert in BRRRR, Wholesaling, or Fix and Flips. I need consistent CoC, Tax relief, and mortgage pay down, etc.
- Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes8y
I agree and have seen many posts about the pro/cons of Turnkey. I'm a busy I.T. professional and my time per hour at work earns me the means to invest. If I had the time to Hustle and BRRRR I could have some forced equity early and not have to buy my equity. I'm buying these for long-term wealth, possible retirement income, and more important to pass on something to my children, so the additional money I paid to a turnkey to do the heavy lifting over the long haul seems like money well spent for now. Long-term performance may sway my opinion though. Norada made the process simple, M.I.P did their part, not perfect but as Jay mentions in other posts I have seen, they do deserve to make a profit for their efforts. Given they manage over 1700 properties, my trust is in the numbers and qualifications at this point.
- Real Estate Professional · Tampa, FL · Member since 2017 · 104 posts · 47 votes8y
@Peter Schuyler Did you consider Memphis Invest ? .In the turnkey circles M.I comes op often as being reputable.
- Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes8y
I am going to look into them. I know they get much positive process on BP, I went through Norada who uses M.I.P. as one of their providers. I'm looking at Indy, Dayton, Jacksonville or Memphis for the next one.
Hello, I purchased a property in Kansas City through Norada last year. They are nothing more than a middle man that earns commission by connecting you with flippers in local real estate markets. I did not have a good experience. The property I ended up buying was a townhome and two months after purchase I received a letter from the HOA lawyer stating that there are not allowed to be any rental properties in this complex! No one caught this, Norada did nothing except to say that they had never had this happen before. They have not helped me at all to try and fix this, although they earned commission as the selling agent. I am still trying to work through this mess, and my best option at this point is just to sell the property and lose money. I would never work with them again. They do not stand by their investments. This may have been just a fluke, and I may have been unlucky, but I am warning everyone I know not to do business with them. They have not helped at all or followed up with me.
- Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes7y
@Jeannie G — I have to respectfully disagree.
The property you purchased through the owner/Provider (Coral Properties) was represented by them as a rental property; however, as you and I both know the HOA restriction never came up at any point from the day we received the listing information to the day you received your closing documentation, and thereafter.
In other words, this was not caught by the provider right from the beginning, and was not disclosed to anyone by the title company before you closed, and was not caught by your review of the closing documents (specifically the CC&Rs).
This certainly was an anomaly and one that only has come up once over the years.
It is and was our intention to help work through this with the original seller (Coral Properties) and formulate a solution for you...
As you will recall from our communications back on August 20th, we helped come up with a few options for this property and we negotiated with Coral Properties to list and sell the property at no cost to you. Do you recall that conversation? I can forward the email thread if you like.
And as you will recall, we discovered there were 24 other rentals in the same community and managed by the same property manager.
Since we haven’t heard from you since August we assumed this was resolved with Coral Properties. Our last conversation with you was that you were reselling the property with Coral.
Although it doesn’t happen often, real estate is a people business and there are a lot of parts involved in a transaction. Issues come up but they can be resolved.
Sorry to hear that @Jeannie G. Sounds like it was more bad luck than Norada trying to scam you or not willing to take responsibility for their actions. As someone, who purchased multiple properties from Norada, through 2 different turnkeys, I can attest that Norada is pretty legit. They provide vetted turnkeys and even personal advice on a deal or a specific situation when necessary. I have not worked with Marco directly, but worked with some of his associates, and so far everyone seems professional, trustworthy, and genuinely interested in helping investors as much as possible.
- Financial Advisor · Member since 2019 · 3 posts · 2 votes7y
I have sold properties through Norada. His team has been top notch.
- Austin · Member since 2015 · 149 posts · 80 votes6y
Originally posted by @Lance Robinson:
Originally posted by @Laurence Walsh-Hodson:
Originally posted by @Lance Robinson:
I have actually purchased 4 properties from them before and am in escrow on a few more with them now. I have had a great experience working with them so far. Let me know if you have any other questions!
Lance
Thanks Lance. Good to know. What area/city did you invest in?
No problem - glad I could help, please message and connect if you have more questions.
From him I have purchased 4 in Indianapolis and am in escrow now on 2 in Kansas City and 1 in Houston.
Question about the Houston property - I'm curious whether you took any damage in the 2019 hurricane? Hopefully not! I'm just curious to know whether things like that were foreseen by investors.
- Austin · Member since 2015 · 149 posts · 80 votes6y
Originally posted by @Thomas Staub:
I have experience with this group.
Strong Points: Coordination. They do have a smooth process down and are in several markets.
Downside: All of my properties are performing under 9% cash on cash ROI.... This backs out vacancy. If you factor vacancy allowance I'm barely hitting 7% ROIs. They mark up their properties way too high. Their investment advisors are a bit sneaky too as I had a bad experience in Huntsville. Marco is polished but it is becoming more clear they are simply trying to squeeze every last penny out of a deal. I am not having a hard time selling these underperforming properties as I need to hold them for 3+ years to make up for the closing costs. Overall I wish I hadn't invested with them.
Can you break down the differences in your actual vs. projected costs that are causing your ROI to be below their projections?
- Rental Property Investor · Orange County, CA · Member since 2020 · 19 posts · 7 votes5y
@Lance Robinson How have your properties with Norada performed? We’re your Indiana property taxes reassessed as the higher 2% rate?
@Marco Santarelli @Peter Schuyler We are complete newbie investors who purchased two properties in OKC through Norada earlier this year. The process was smooth and pretty straightforward, and our investment counselor at Norada gave us all the hand-holding, advice and insights we needed to feel comfortable and confident about the whole process. The turnkey provider we did business with in OKC was top-notch as well.
Our current property manager, however, is less than stellar (poor communication and transparency, which can be difficult if you’re an out of state investor), but they seem to do a decent job of responding to our tenants’ needs and keeping them happy. Both tenants are current on their rents and have renewed their leases even in the middle of the pandemic.- Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes5y
Good morning @Rina D.!
I'm happy to hear about your positive experience with our company, my team, and your two properties being smooth and straightforward. That's usually the case 90% of the time. (It's never perfect because we're dealing with people and other "moving parts".)
Since I don't know why your current property manager is "less than stellar" on their communication, I'm going to suggest reaching out to your Investment Counselor here at Norada to help you out. Maybe it's more of a wide-spread issue and common for them, even though they're doing a good job on the management side. Either way, it would be good if they had better communication with you.
Of course, remember too that you're in charge and are free to change your property manager anytime you like. I'm not suggesting you do that just yet as it doesn't appear you have a real issue outside of the poor communication.
I would suggest connecting with them to clear the air and set realistic expectations on both ends as it related to communication. Sometimes these issues are simply an expectation mismatch.
I hope that helps. Feel free to reach out anytime.
Continues success!
@Marco Santarelli Thanks for your response! We did give feedback about the communication issues to the local turnkey provider, and we were told that it’s a common complaint that they’ve received about this particular PM company. It sounds like they have been around for a long time, but have not really updated their systems and processes as they grew as a company, so their operations can be clunky and disjointed. That being said, their experience in the industry is invaluable of course. They seem to know what to do to keep our tenants happy and paying their rent. We have taken their advice about how to handle lease renewals and rent increases throughout this pandemic, and they have not steered us wrong so far. :) so at this point, we’re willing to let the communication issues slide, since they’ve been great with the other aspects of PM.
Thanks for the advice! And thanks for putting out a fantastic podcast, it has been a great part of my husband's and my REI education.
- Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes5y
Hey Rina!
Thanks for the update, and I'm glad the financial side of things are moving forward well for you. :)
Also, you're welcome regarding our Passive Real Estate Investing podcast. Glad you and your husband are learning from it. Let me know if there's anything else you'd like me to cover. :-)
Continued success!
- Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes5y
An update, my experience with Norada went very well, it has been a few years owing Memphis properties. The one big thing I learned which you do not get on any tour, or see on any bus visit, is the back end property management team, their software, thier processes to collect rent, deal with late tenants, and now evictions. 2020 was a strange year for all, all four of my Memphis properties went from positive cash for to negative most of the year. Some have caught up, but I have one rental that did not pay the $1400 rent for 7 months, went bankrupt because of covid, and they are working it out, but the 7-8K loss might not be seen in cash anytime soon.
I have no issue with the turnkey process, the buy, renovate, and flip to me at retail price, but as other have said over and over, the cash flow, which is why we get into this is greatly effected by the boots on the ground. The Property Management team can make or break a long term investment if not done right. PM is a thankless business, and is the main reason I went from self managed to turnkey to begin with.
What would I do differently, is be more involved in lease verification, 3x income, background check verification, credit score verification, I use to hand pick my tenants, which sometimes ended up in one month extra vacancy as I vetted, but at least if something went wrong I could only blame myself. For upcoming lease renewals I want to be more involved, especially since Covid has driven different behavior, some tenants took big advantage of local authorities announcing no evictions, some did not.
@Peter Schuyler Sorry to hear that you loss money. Can you share where these properties are located? Also did the numbers that Norada published match up to your own calculations and experience?
Originally posted by @Lance Robinson:
Originally posted by @Laurence Walsh-Hodson:
Originally posted by @Lance Robinson:
I have actually purchased 4 properties from them before and am in escrow on a few more with them now. I have had a great experience working with them so far. Let me know if you have any other questions!
Lance
Thanks Lance. Good to know. What area/city did you invest in?
No problem - glad I could help, please message and connect if you have more questions.
From him I have purchased 4 in Indianapolis and am in escrow now on 2 in Kansas City and 1 in Houston.
Hey Lance,
Wondering which turnkey providers besides Norada do you recommend?
Thank you
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