Turnkey recommendations (Norada or Memphisinvest or Roofstock)
Gainesville, VA · Member since 2018 · 17 posts · 4 votes
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 heard all positive things about the three companies you mentioned. I'm actually under contract on my first investment with Roofstock and so far the process has been pretty smooth. There's a very detailed case study on Roofstock by Jason Gines that was extremely helpful and allowed me to move forward with them
https://www.biggerpockets.com/forums/92/topics/468304-roofstock-case-study
Thanks
What market are you looking into? I believe only Memphis Invest is a Turnkey provider and I believe they are in multiple markets.
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 think there are some horror stories floating around about Memphis Invest. Do very good due diligence if you invest with them. I thought about doing TK when I first got started. After touring some TK properties I thought better of it and decided to invest on my own instead.
It sat vacant all summer long?!?! IMHO, you need to change management companies pronto. One of my business partners works in Memphis and his houses never sit vacant that long. Nowhere near it. Search "property managers in Memphis" on here and call the ones recommended most. Pick the one you feel best about. I'd be doing that first thing Monday if I were you.
I think there are some horror stories floating around about Memphis Invest. Do very good due diligence if you invest with them. I thought about doing TK when I first got started. After touring some TK properties I thought better of it and decided to invest on my own instead.
lol oh God. If people are saying there are Memphis Invest horror stories there is no hope for any of us. C'mon Memphis Invest is literally the most respected company in the Turnkey space. I am seeing way too much unreasonable complaining around the forums lately. Just the other day I saw a thread with investors piling on a Turnkey provider because somebody broke into the investors house while it was vacant. It's rental properties guys, that's part of the gig. If you are looking for a 100% risk-less & predictable place to park your money I'd suggest a CD at your local bank.
Correction-I have heard horror stories about Morris Invest, not Memphis invest, my apologies!
I think there are some horror stories floating around about Memphis Invest. Do very good due diligence if you invest with them. I thought about doing TK when I first got started. After touring some TK properties I thought better of it and decided to invest on my own instead.
Some of that time vacant was purposeful in the fact that after the tenant left, the company needed time to renovate, around 30-45 days, so I was prepared for that time, but the extended renovations into Sep and initial delay put us outside the summer. The only impact so far was a hike in interest rate, and the first mortgage payment being paid without any inbound income. On my Texas properties, I truly have around 5% vacancy YoY, so that is what I was expecting 4-5%. I'm hoping year 1 is an anomaly for this property and Y2, Y3 is more like the 4%.
To be fair, I misunderstood the timing. Stay on top of your PM though. Managing your manager is an ongoing thing and a pain in the rear. Their job is not easy and you are going to pay for some convenience they provide but be very leery of sustained vacancies in Memphis. If you have more issues I recommend reaching out to @Alex Craig and @Antoine Martel. I found them both to be very helpful in Memphis. And monitor the Memphis forums on here, it’s very active. Best of luck.