Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
I have been on biggerpocket for a while finally decide to try one of the turn key Company called Norada Real Estate( yes I find them here ) To starting to work.
As first time out of state turn key buyer , I just want to write down my experience as diary and give everyone a inside information as this form has helped me a lot and hope my experience can give back to community
So step 1) I went to Norada Real Estate website and give them my contact Info as today 4/15/2017 . Hopefully they will communicate back soon. I find a lot intereting listing on website which is a good sign. As I have talked to Morris invest before I felt I was left on the dark and did not have access to any their listing online. So far I like Norada Real Estate website.
Step 2) will update my experience once they call me back and hopefully continue with the entire purchasing and renting out process with them. And will update here step by step.
Clarksville, TN · Member since 2016 · 238 posts · 96 votes
9y
I have done very well in TN and I have clients/friends that do well in TN. To write off an entire state because of such a tiny and I do mean tiny sampling is crazy. There are always going to be bad deals in any state, city, town you go to but there are also gold mines to be had if you know where to look.
I can see that you filled out the form on our website about 30 minutes ago. You've been assigned to one of our Investment Counselors, Steve Olson. He will reach out to you soon, but probably Monday the latest as tomorrow is Easter Sunday. :)
And knowing that this is your first experience we will make sure that it is a smooth one for you.
As always, feel free to reach out to anyone of us on our team. Some of us work around the clock. Our goal is to help you teach your financial goals through turkey cashflow rental real estate.
Investor · Mount Bethel, PA · Member since 2013 · 45 posts · 29 votes
9y
Hey Liz! I think you will like Steve. He's been very easy to work with. I close on my first turnkey property with Norada property on Monday (6th rental though so I'm not a newbie :) Good luck!
Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
9y
Roxanna Pifer thank you for your feedback, is this your first purchase with them ? I plan to keep this diary for years for rest of my rental and tenant and ROI in record so other Members can benefit from it .
I search for feedback for many company there is only people who report back the purchase experience but I am sure most people like to see the actual ROI return and how realistic with the cash flow they claim on the web. And if PM company can really take care of you . The after purchase service I refer too.
I did some research on their website listing. No sure if their listing is cheaper than just go mls most ROI are about 7-12% after PM . I am hoping to find 15% ROI on cash to cash return not sure if is realistic . I though for turn key o realistic . For mls might be hard.
Can anyone explain if you think turnkey is cheaper than mls listings?
I have been on biggerpocket for a while finally decide to try one of the turn key Company called Norada Real Estate( yes I find them here ) To starting to work.
As first time out of state turn key buyer , I just want to write down my experience as diary and give everyone a inside information as this form has helped me a lot and hope my experience can give back to community
So step 1) I went to Norada Real Estate website and give them my contact Info as today 4/15/2017 . Hopefully they will communicate back soon. I find a lot intereting listing on website which is a good sign. As I have talked to Morris invest before I felt I was left on the dark and did not have access to any their listing online. So far I like Norada Real Estate website.
Step 2) will update my experience once they call me back and hopefully continue with the entire purchasing and renting out process with them. And will update here step by step.
This is a great idea. Please also do some reach into the companies. I have seen some who claim to be a "turnkey" provider and then all they do is show you listings off of the MLS. They have no relation to them, they didn't even do any of the work. OR I have heard where they sell you a property and then dump you off on some other PM company. It is as if they sell you the home and stop caring about you as an investor. I would be interested to hear about what you find out there.
Rental Property Investor · Highland, IN · Member since 2016 · 31 posts · 23 votes
9y
You might get lucky, only spend money you can afford to lose. I tried 3 properties to play the odds. So far 2 are failures 1 is performing. So zero gain, small loss so far after almost a year. I also hit 3 different PMs, all in Tennessee. Hopefully they pay off after a couple years. I get better returns in my hometown, around 20%.
Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
9y
@Jay Grabbe , I have a friend who suggested my never invest on Tennessee, She just say people there are not resonable no sure what she means. But she is from New york, I think might be different culture. I just decide not to invest on Tennessee . I could be wrong but therre is many other choice, I think I willl choose NC and SC or Texas for now.
@Tom Ott , Yes hoefully O get positive experience from Novada.
Self Update: 4/18/2017
So step 1) I went to Norada Real Estate website and give them my contact Info as today 4/15/2017 . Hopefully they will communicate back soon. I find a lot intereting listing on website which is a good sign. As I have talked to Morris invest before I felt I was left on the dark and did not have access to any their listing online. So far I like Norada Real Estate website.
4/15/2017 Marcos , Reply to me here saying someone will call me on Monday. I did get a general email later and book my phone call with Steve Olson.
4/17/2017 and 4/18/2017 Monday and Tuesday No one call me from Norada. ( So I guess They will call me on original Booking date? which is Thursday 4/20/2017
next step ) will update my experience once they call me back and hopefully continue with the entire purchasing and renting out process with them. And will update here step by step.
Clarksville, TN · Member since 2016 · 238 posts · 96 votes
9y
I have done very well in TN and I have clients/friends that do well in TN. To write off an entire state because of such a tiny and I do mean tiny sampling is crazy. There are always going to be bad deals in any state, city, town you go to but there are also gold mines to be had if you know where to look.
Rental Property Investor · Orange County, CA · Member since 2016 · 512 posts · 374 votes
9y
Liz Chen
I am doing well so far In memphis, tn
Maybe your friend invested in wrong neighborhood which is in every city anyway.
@chris clothier, James Wachob are great local turnkey providers
Otherwise you can go my route and buy through local realtor and recommended prop mgt company
Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 889 votes
9y
@AJ Singh Thanks for the kind words! The key is to find a great team! Ideally you would find a company that has everything under one roof. Acquisitions team, renovation crews (fully licensed and insured), Property Management, and a Real Estate Investment Brokerage in case you ever decide to sell.
By teaming up with a solid firm you can mitigate your risk and have some "boots on the ground" that have your best interest in mind.
Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
9y
New update 4/20/2017 , spend one hour with Steve olso from norada on the phone . He is very knowledgeable and not afraid to share any information with me. The conversation make me feel very at easy and honest .
4/21/2017 receive some listing from steve regarding Houston Texas . Most of cap rate is only 7% .
I think that lower side of my expectation. I would though out of state investment will be around 10-13%.
But I will do more research on it .
New update 4/20/2017 , spend one hour with Steve olso from norada on the phone . He is very knowledgeable and not afraid to share any information with me. The conversation make me feel very at easy and honest .
4/21/2017 receive some listing from steve regarding Houston Texas . Most of cap rate is only 7% .
I think that lower side of my expectation. I would though out of state investment will be around 10-13%.
But I will do more research on it .
This will be interesting to follow. Keep in mind a single family home is not valued by cap rates. You can measure the cap but it will not have a direct relationship to total profits like with commercial properties. In fact, if studied, the lowest caps sfrs might actually be the most profitable. More important than a snap shot in time psuedo cap rate is the direction the cap rate is going in the area...up or down. Ideally you want it going down or compressing, that would mean that values and rents are rising. The opposite would be true if the cap rate is rising or if already at double digits this could indicate something fundamental is off with that hood already. Highest caps almost always mean highest risks too.
Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
9y
@Liz C. I crunched the numbers on few single family in Houston Tx and it looks to me that one need to buy at around 15%-16% "cap rate" to achieve reasonable cashflow. The taxes and HOA on properties in Houston often kill the deal for me.
One 4bed, 2 bath had Taxes at $6000. This was sold at foreclosure for $189k and would have rented for $1700.
Rental Property Investor · Highland, IN · Member since 2016 · 31 posts · 23 votes
9y
A lot of the newer stuff is hard to get 1% rent or above, Especially adding the Hoa fees. The older stuff has a lot of repair costs even after the remodels they do. You have to be careful and not be afraid to walk away.
Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
9y
Thank you all for your replies .here is what comes down for me to select. I am thinking about buying a turn key on Houston Texas price about 129k ,rent 1290.
After insurance and tax PM , will make $750 a month . Zip code 77041
Anyone local can give me some inside of the location and the market appreciation and if this is s good buy and hold?
Thanks!
The school rating is about 4 and 5 out of 10.
But location wise is 30 minutes to Houston and either steven from norada or the local turn key company both think this is a good buy.
Let me know what do you guys think.
Thanks
Investor · Irvine, CA · Member since 2014 · 53 posts · 27 votes
9y
Trust but verify. Do your own due diligence. In reality you will not make anywhere close to $750 a month. There will be capex and maintenance cost. Yes, even turnkey can have lot of capex and maintenance in the first year.
Of course norada and local turnkey are going to tell you that it is a good buy. They have an incentive to sell.
Real Estate Agent · Pleasant Grove UT and Hurst, TX · Member since 2014 · 128 posts · 63 votes
9y
Hi @Liz C., I still think it's a good stable deal for you :) Remember, you can always get a "better" deal if you are wiling to go to a market, source a deal through the MLS, auction, etc, hire contractors, and all that fun stuff. But if you don't have the time/know how/desire to do all that, then you have to make the personal decision on what to do with your money. What kids of investment returns are available out there? Personally I think you'll find that a good property in a good market will do well not just because of the cash flow, but the depreciation, appreciation, etc. So the "cash flow" on paper isn't the end of the story. And of course, "direct ownership" of real estate is never a totally effortless ride. As @Gaurav M. points out, you'll have maintenance, etc.
You can always go to other markets besides Houston for a higher "return." It's a cost benefit question and you have to go to the market that's best for you taking all these things into account. I recommended Houston to you because you indicated you want a smooth transaction and a stable market and turnkey operator. I can tell you the team I have you paired with there are good business people. They do great rehabs and they run their property management professionally. Unfortunately I can't say the same about every operator in the turnkey space.
Anyways, you know where to find me when your'e ready to chat more. Thanks!
Trust but verify. Do your own due diligence. In reality you will not make anywhere close to $750 a month. There will be capex and maintenance cost. Yes, even turnkey can have lot of capex and maintenance in the first year.
Of course norada and local turnkey are going to tell you that it is a good buy. They have an incentive to sell.
Yes, as Ronald Reagan once said, "trust but verify". Always good advice and something we tell investors to do above and beyond the information they get from and through us.
There were always be maintenance and repairs that need to be budgeted, regardless of what property you own. Capex should also be factored in as long term expenses for roof and mechanical items. Properly renovated turnkey properties should not have any deferred maintenance items and long lifespans on Capex items.
We would never suggest a property is a "good buy" unless it really is. We are market, provider and property agnostic, so we're not married to specific deals. It's either a good deal or it's not. If it's not we simply move on.
Property Manager · New York, NY · Member since 2016 · 388 posts · 90 votes
9y
4/21, had phone conversation with both steve from Norada and turkey provider , narrow down a single family with cap rate 7%, almost want to put tricker and just jump into my first deal but after asking on biggerpocket and think over the weekend myself . I can still find cap rate 7-8% in NJ. Why invest on houston for 7%?
For second phone call steve was still easy to reach and very transparent and patient when help me to narrow down the properties . I do feel like I have someone holding my hand on the process as a newbie turnkey buyer.
4/25 today Email steve for other city turnkey listings. And let him know 7% cap rate I lower than my expectations of investing. So I ask him to connect me with others state turn key providers.
So far everything is very positive with steven from norada.
I will keep updating my story .
Investor · Redwood City, CA · Member since 2016 · 33 posts · 28 votes
9y
@Liz C. Hmm, I agree 7% is low since that doesn't include capex and the headaches/stress of being a landlord. If you have a good property management crew, that mitigates a lot of that though.
But...I've been considering other investments like peer street or realty mogul or realty shares. Have you thought about some of these other alternatives?
You can get 9%-10% with none of the stress and headache.
Of course, you don't get depreciation benefits and other tax benefits or appreciation, but is that enough?
I'm in the same boat as you and looking at where I can deploy my funds effectively.
Maybe we missed the boat this cycle for ownership in a buy and hold.
Again, thanks for creating this post and fostering discussion.
All the percentages were thrown out of the window based on my experience. With a 3 month vacancy and a reduced rent, I am only expecting an equity build up. People rightly pointed out to me that equity build up is more important than monthly cash flow. That's what I am counting on now.
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
9y
@Liz C. I agree with @Jason L. that getting just a lower return from buying turnkey may not be the best way to go. Of course you can do better in other markets where there is better cash flow (and less chance for appreciation). If you can do as well close to home you are much better off IMHO. As Jason suggested you can also explore other avenues of passive REI. I have written an article about