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Lehigh Acres - Renttoretirement (RTR) projections were a scam

Posted Feb 14 2024, 12:43

I bought  a new construction with the Renttoretirement (RTR) platform in Nov-Dec'23 and regretting it big time! The numbers forecasted by them come nowhere close to reality. I took out a mortgage at ~7% and now simply burning cash. I have a property manager in place (one recommended by RTR) and he suggests (i) new build supply is way higher than demand (ii) realistically (if at all we find a tenant) we should target a rent of $2100 vs $2500 projected by RTR. For context, my mortgage alone is ~$2k/month. I feel duped and stuck. Anyone else with similar experience? Thanks 

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Amber Stout
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  • Tampa/Saint Petersburg, FL
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Amber Stout
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Replied Feb 15 2024, 08:36

I'm sorry to hear that it's not working out for you currently. In my opinion, the important thing is that you get your property cash flowing so you're not burning cash. 

Have you spoken with other property managers in the area to get an idea of target rents? I've had property managers tell me my property will rent for $1,800 and I've had other's say $1,400 for same property. Also, make sure the property manager is a solid one. I've had property managers have my property listed for a month with 5 showings, 0 apps. I stepped in and got it rented in a week so it could be the property manager. 

Other ideas to increase gross rents: 
Can you change up your strategy and do a short term or mid term rental? 
Can you do a Padsplit with the property? 

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Jay Hinrichs#1 All Forums Contributor
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Jay Hinrichs#1 All Forums Contributor
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Replied Feb 15 2024, 09:09

I highly doubt they were a scam. One has to remember that rent rates nationwide have softened.

And its very common these days if your putting minimum down which it sounds like you did to have negative cash flow the first few years..

Also it is up to you as the investor to research where your buying . Lehigh acres has a LOOONG history of ups and downs and just a basic google earth search will show you there are 200k platted lots so Lehigh acres historically goes in cycles of over building then contrition etc. I first went there in the mid 80s and i was buying foreclosures there in 2009. when the last building boom was going in 2004 to 2007 until the big crash.

So for now you have a few choices sell and get what you can. Or rent it at TODAYS market rate not what it was 18 months ago and then raise rents as things tighten back up.

All these companies can do is present a product and give the financials at that time.. Its up to you to Verify them and to research where your buying and the history of the area . Along with supply demand which is an integral component of real estate investing ..

U cant just blame others if you never did your home work.

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Robert Ellis
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Robert Ellis
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Replied Feb 15 2024, 10:26
Quote from @Vasudha Chaudhary:

I bought  a new construction with the Renttoretirement (RTR) platform in Nov-Dec'23 and regretting it big time! The numbers forecasted by them come nowhere close to reality. I took out a mortgage at ~7% and now simply burning cash. I have a property manager in place (one recommended by RTR) and he suggests (i) new build supply is way higher than demand (ii) realistically (if at all we find a tenant) we should target a rent of $2100 vs $2500 projected by RTR. For context, my mortgage alone is ~$2k/month. I feel duped and stuck. Anyone else with similar experience? Thanks 


 Rent to Retirement is a facilitator of off market deals. There are a lot of places that the deal went wrong. Did you ever visit Lehigh acres? I drove it in October after BP Con and there were two houses across the street from each other each asking for $2100 a month in rent when forecasting models of most BTR middlemen (people who don't build but just sell deals and put 6% on top, glorified realtors) were saying they could rent for $2500. Did you interview the builder? Did you do your own underwriting of the deal? We build 2 bed 1 bath stacked triplex that rents for $2.25 / sq ft which a single family home even a small one is always at the best around $1.7 / sq ft. I don't know how many bedrooms yours has but let's say 3 and its 1400 sq ft, that is $2100/1400 is $1.5. I'm doing things 30% better by just designing Floorplans. The third place the deal went wrong is the submarket. Lehigh acres has no commercial areas and no infrastructure or very limited. it doesn't have public utilities it's private well and septic. Unincorporated area. I love the numbers to build and make money as a builder but there's no economics driving people there compared to Tampa, New Port Richey, Lakeland, that are closer to major sities. Naples / fort Myers in my opinion is a very soft submarket. There are new builds flooding the market in North Port and Cape Coral for $180 a sq ft. We do our projects on infill lots where the values are much higher. You also bought a new build single family at full value / appraisable value. We build direct for a 20% equity. Your garage sq ft let's say you have 400 sq ft garage, that cost $30k on average to build with profit. You lost that money because it couldn't be appraised and the same sq ft if it was heated would be worth $200 per sq ft at a minimum in any market which is $80k swing. All of those factors together are why you aren't doing well. Rent to retirement isn't a builder. You need a strong operator / builder / agent / developer to look at all of these considerations and to have studied the market or you have to do it yourself. I'm sure their statements say that they prepared it for informational purposes over. In Columbus, we take all of these issues you just mentioned and build a stacked triplex that has high density (42 dwelling units an acre), public utilities, higher rents per square foot, cost per unit under $115k basis for the investor (not $300k for a single family) and that is attached here. I think where you went wrong is your up front lack of underwriting and vetting of the deal. The only person who decided to buy the deal was you. The floorplan we build is below and it's the most efficient 2 bedroom plan you can build. 

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Eric James
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Eric James
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Replied Feb 15 2024, 10:40

Over the last 5 years I've seen a lot of people do something similar. A wave of new people getting into real estate, maybe fueled by low interest rates. Many first times try flipping a house or buy their first rental, only to have it be a huge flop. 

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Michael Smythe
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Michael Smythe
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Replied Feb 16 2024, 05:46

@Vasudha Chaudhary everyone is jumping on the "passive income via real estate" bandwagon BEFORE doing enough research!

Believing anyone's numbers BUT YOUR OWN is foolish.

BTW - we've got some swampland for sale, you interested?

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Replied Feb 16 2024, 11:21

UPDATE: The RTR team incl. Zach reached out to us within 24 hours and are currently helping us work through a resolution.

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Robert Ellis
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Robert Ellis
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Replied Feb 16 2024, 11:39
Quote from @Vasudha Chaudhary:

UPDATE: The RTR team incl. Zach reached out to us within 24 hours and are currently helping us work through a resolution.


 Zach is a super responsive and runs a great organization 

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Replied Mar 13 2024, 09:00

Update: Our home has been rented for $2,200, which is above what I initially stated.

Additionally, the RTR team has been extremely responsive working with the local PM team to do everything possible to get the home rented in a timely manner. RTR also provided a rent comp covering the difference in rent from what we expected, which is above & beyond as they were not obligated to do that. This really goes to show that they care about the success of their clients, and stay involved to assist when things don't go exactly according to plan. That speaks volumes about their integrity. We plan to continue to work with them on future investment properties.