Anyone have experience with rent to retirement?

Question

Has anyone out there used the turn key operator, Rent to Retirement? Can you tell me about your experience?

Thanks!

Zach Lemaster · Answer

Hi @Remy Piazza!

Thanks for the interest.

Here are many forum threads that will assist you in answering your question and doing additional research.  Feel free to reach out with any questions.

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/44/topics/1058814-first-time-with-new-construction-cape-coral-fl?highlight_post=6055029&page=1

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/co/RentToRetirement

https://www.biggerpockets.com/forums/92/topics/929410-rent-to-retirement-updates?highlight_post=5508807&page=1#p5508807

https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

https://www.biggerpockets.com/forums/311/topics/915728-experience-with-rent-to-retirement-turnkey?page=1#p5345200

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster?highlight_post=6192149&page=4&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification_V2&utm_channel=28426&utm_content=Marketing

https://www.biggerpockets.com/forums/67/topics/952977-turnkey-in-indianapolis-through-rtr-case-study

https://www.biggerpockets.com/forums/12/topics/997350-lessons-learned-from-buying-my-first-rental-property?highlight_post=5748036&page=1#p5748036

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/forums/48/topics/874096-reviews-on-r2r-and-nch?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5123754

https://www.biggerpockets.com/forums/311/topics/883772-turnkey-investing-renttoretirement-feedback-reviews?highlight_post=5171720&page=1#p5171720

https://www.biggerpockets.com/forums/92/topics/950188-rent-to-retirement?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5535505

https://www.biggerpockets.com/users/ZacharyCole/references

Remy Piazza · Answer

Thanks for this very thorough reply Zach. Much appreciated.

Ruchit Patel · Answer

I can talk about my experience with RTR. It's been more than two years I believe since I am connected with them. DM me and we can connect.

If you are looking into passive turnkey investment out of state, yes, they are pretty good at that.

Zach Lemaster · Answer

@Remy Piazza  Thank you for the follow up.  This is a common question we get, especially as many people will be quick to lump all TK companies into this general assumption without truly taking the time to investigate each business & investment opportunities.  Below are a few points to consider as you continue your investigation on the right path that best suits your goals:

1) The assumption that all TK companies operate the exact same would be inappropriate.  This is the same for all types of businesses in RE, or anything in business really.  Not all TK companies sell properties without any upside or equity potential.  To be very specific, at RTR, a large portion of what we focus on is new construction properties (BTR) that ARE sold exclusively to our network below market value.  We currently have projects outside of Orlando (Polk County) where appraisals are consistently coming in $30k+ above sales price.  The new builds are in good areas that have strong rental demand to allow for attractive cash flow and rental growth.  This is an example of investing in the right location where there is excellent opportunity.  Here is another example of a success story where our client came into significant equity upon initial purchase: https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

2) While there are some TK companies that do sell properties well above market that require you to pay more than it's worth or close all cash, it would be inaccurate to assume all TK companies do this.  In the right location, there are plenty of deals that are a win-win for everyone involved.  That is where the best deals AND relationships are made.  We value our relationships with investors more than squeezing every dollar out of a property as that keeps the investor as a return client to continue investing with us (which is more profitable in the long run vs just selling one overpriced property).  Just as there are many different property managers, lenders, insurance agents, builders, contractors, etc. that operate in the same arena, they do not all operate the same and offer the same products/opportunities.  Same goes for TK as not all businesses should be assumed to be the exact same.  Many do offer tremendous value for investors & many resources beyond just buying a home, which should not be overlooked.  Do your research, talk with other investors that have used the company you are researching, and check online feedback.  While RTR is not perfect by any means, we have an extremely positive reputation in the TK space that we have spent the past decade building & that we are very proud to showcase.

3) If a TK company is requiring you to pay well above market value or requiring cash closings, that would be a concern.  We always recommend getting an appraisal done (which most all lenders require) & we do not see a significant variance in the vast majority of property appraisals compared to purchase price.  If there is a low appraisal for whatever reason, that certainly opens the door to negotiation.

4) Investing with the right TK company will provide you immediate access to a comprehensive team of professionals with a proven track record that will allow you to be a more successful investor with your own investing, which is great!  Immediate access to the right lenders, CPAs, Attorney's, Property Managers, Contractors, Builders, Insurance Agents, Software, Agents/Brokers, Acquisition teams, etc. can save you a significant amount of time, money & frustration over time allowing you to focus on running your REI business vs operating in it.

5) TK is a great way to immediately access markets and properties in some of the best locations throughout the U.S. that you may not be easily able to access otherwise.  In my experience investing, simply being in the right market is really what makes all the difference over time.  We focus our investing on choosing the right locations vs trying to find distressed properties in areas to buy below market value to get a better deal on a property that will take up more of our time and energy.  This has allowed us to scale much quicker, exponentially growing our portfolio beyond what we would have been able to if we only focused on rehab projects.

6) We have many investors that are full time RE investors or rehabbers that simply buy TK as an easy way to scale and diversify their portfolio beyond what they are currently working on.  One of our investors being the well known creative finance expert, Pace Morby, who recently invested with us in a FL new build that had significant, immediate equity.  TK is a great way to easily obtain more tax benefits each year through acquiring more properties across multiple locations, especially if you are considering accelerated depreciation!

7) Know what your investing strategy is.  If you are looking to be an active investor to build your own teams in each location or someone that wants to wholesale/rehab/brrr properties, then TK may not be the right option to start with.  However over time, TK could be an option as well for you to continue to easily expand your portfolio.  TK generally fits well for people who don't want to be too active by working with an established team to invest in long term, cash flowing assets that will grow in equity and rental income over time.  If the property is in a good location, cash flows well and meets your investment goals, then it may be a good option for you to start with.  We've had many investors that have started with the TK route in a specific market to later expand their own operations in the same or other markets to be very successful.  I'd like to think they learned a few things from us on how to build a strong team & process.  There certainly is a value component to that!

8) You most certainly could find good deals on your own currently (even on the MLS now) as the market has softened some.  However, there seems to be an assumption here that by doing this on your own you would find a deal well below market value, which should not be assumed.  Sure, if you are looking for a distressed property that requires work to be done to it, there is a likelihood that you could negotiate a deal below market value, but you need to be well informed on the total amount of repairs you need to put into the property along with how long it will take to rehab the property & have a clear plan on how you are going to source the right contractors to do the work for you if you are not going to be doing it yourself.  When looking at purchasing a distressed, rehab property, this is a completely different type of investing than TK.  This requires knowing how to build a team to rehab and manage the project & carries a lot more variability & risk.  I'm not saying this is not possible.  It most certainly is possible, but it's important to understand what you are getting into.  If going this route, I would recommend budgeting for unforeseen expenses & extended timeline for rehab completion.  After going through this process on hundreds of homes across the nation, very seldom does a rehab work out exactly as planned initially.  This is a way to buy below market value to allow for a value add and forced appreciation.  Any seller (TK or otherwise) is going to try to sell their home for market value if it's in good condition & if they are in a strong market.  Why would they not want to sell their home for what it's worth?  Just don't assume that you are going to find a much better deal on your own if the home is newly built, recently renovated & in a good market.

Hope this all makes sense & helps you, or anyone reading to determine what the best investment strategy is based on your personal goals.

Feel free to reach out at any time with questions.

-To your success!

Remy Piazza · Answer

Thanks Zach. I am weighiomg the pros and cons of going it alone as I have in the past and manage a PM, or go with a turn-key provider. I believe there are a lot of benefits to going with a turn-key provider, however, and speaking candidly, my biggest hang up is that there doesn't seem to be a lot of "meat left on the bone" with turn key providers. Curious to hear your thoughts on that...

Anyone have experience with rent to retirement?

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