Norada
Real Estate Agent · Santa Clarita · Member since 2015 · 57 posts · 11 votes
Hi Friends, I'm wondering if anyone here has had success with the turnkey company Norada Real Estate Investments?
Thanks, Laurence
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:
My Criteria/Situation:
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:
Closing:
Post-Closing:
Some Observations:
| 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.
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.
Thanks for the feedback, who would you recommend that you have worked with instead?
TIA
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.
Have you used any other provider since? if so which ones and how was your experience?