Detailed report of my recent (bad) experience with Rent to Retirement

[Mendy M.]

Here’s a pretty detailed report of my recent (bad) experience with Rent To Retirement:

I contacted Rent To Retirement about buying a property or properties with them. The experience was pretty awful. Thank God I didn’t go for it in the end.

I had my call with one of their “investment strategists” - he seemed kind of sluggish and didn’t seem especially kind or transparent to me. He wasn’t especially knowledgeable or helpful.

When I started talking to him about the risks of overleveraging - he claimed to me that there is no added risk to that and that if I had a foreclosure, it would barely damage my credit file, and I’d be able to continue life as normal continuing to get mortgages afterward.

A little Google search showed me how that was false - the Lender could sue you, and continue to go after you, even after foreclosing on the property - if they are still owed money on the loan, after seizing your property. Plus, you are unlikely to be able to get any normal mortgage for years to come after a forclusure.

But I thought okay, I’ll still follow through with this.

I got preapproved for a mortgage. Then I followed up with my Rent To Retirement Rep.

We discussed various properties, I got the sense that whenever I started digging into the details of their numbers, he got uncomfortable, and was evasive, he also just didn’t know a lot of things.

Then he emailed me that night that two properties just came on the market, and if I was interested, I would need to respond fast. I emailed him that I had interest in one of them, and some questions about the properties, to which he never responded. For example - the amount that they put down in their brochure of the property, property tax was extremely low - being that the property was assessed before the rehab was done, and was therefore worth extremely little when it was appraised by the City. So I asked: When the city reassess the property pretty soon, will property tax amount go up a lot? To which he never responded.

Then I spoke to him over the phone later that day, and he told me, that unless I answer him if I wanted to buy the property within a few hours, I will lose the chance to get this property, claiming that there will likely not be such chances again in the future. So I told him I will do some research and get back to him very soon.

I started crunching some numbers.

I decided to do some research – I spoke to property managers and real estate agents in the area. They told me the property was significantly overpriced – even if it was fully rehabbed and renovated very well.

They also said that the amount the property could pull in rent was much less than the amount that Rent To Retirement claimed it would be.

Rent To Retirement also did not account for any amount of money for closing costs, they accounted for maintenance costs being at 3%, which is considered extremely low. They accounted for property management - somehow being free (though they claim they could have a deal for it to be free for year one only). I checked with their lenders, and the rates that Rent To Retirement put down in the brochure, were significantly lower than what they were able to offer.

Now my Rent To Retirement rep emailed me claiming that the property was sold to somebody else, and it will be rented out for even more than they claimed it would go for - I find that very off, being that I checked on Zillow and there was no property in that area listed for rent, anywhere close to that price. Plus, I trust property managers in that area more than Rent To Retirement, being that they don’t have incentive to claim that it will rent for a higher price than it would...

I also think that it is extremely strange that Rent To Retirement does not have a single non five star review. Even the most well rated and run companies products are rated at Best 4.8 or 4.9 star, how can Rent To Retirement’s rating be higher than that?!

Especially, given that we are dealing with a company that deals with real estate, where there are many more variables and things that could go terribly wrong.

[Grant McMillan]

Mendy,

We are sorry to hear about the unfavorable experience you had speaking with one of the reps at RTR. While we always strive to do our best to set investors up for success, we are not perfect by any means. This post is the first time leadership is hearing about your concerns. We are happy to know that you were able to connect with our CEO, Zach, to learn more about the apparent miscommunication concerns so we can make internal improvements as necessary and ensure all our staff are operating at the highest level possible. And to ensure that you have accurate information. Zach thought it was a very productive call with you and appreciated your time/feedback.

We do wish that we would have learned about this earlier so we could have intervened early on. We have multiple investment reps that we can reassign when it is not a good fit for whatever reason. We also have a team specifically dedicated to client success that would have liked to know about this right away to get you assigned to the right person and manage issues immediately. We do have a very good reputation on BP as you have mentioned because we do care about investors' success, and we are deeply concerned that the representative you had interaction with at RTR was not up to expectations.

Please do reach out at any point to discuss further or see how we can remedy the concerns you have. We understand that you did not invest in a property through our platform, so it appears that much of the concerns comes from the individual you were speaking with directly. 

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For others reading/commenting on this thread, I would like to clarify a few items:

-We have hundreds of builders and property managers that have been approved to market their services on our platform. We do not select them. They apply with us and we either accept or deny them based on their track record and diligence. Yes, there are many builders, property managers, lenders, insurance providers, contractors, etc. that get immediately cut off from our marketplace when their performance lacks. There are many businesses that do good work for many years and then start to lack in performance over time. That is simply how business goes, especially in turbulent real estate and economic cycles. We keep close tabs on performance of each team on our marketplace and the RTR team is always quick to intervene to assist individuals when issues arise. Anyone can easily see that reading through the hundreds of reviews about RTR on BP for over a decade now.

-No, you cannot pay to have negative reviews removed on BP, BBB or any other site we are on. Yes, you can pay for advertising.

-For clarity, this particular review is referencing conversations with a single RTR rep that we are dealing with internally. The original poster did not actually invest through our platform, nor did they incur any costs whatsoever at any point.

-Yes, there are hundreds of transactions through our marketplace every month, and properties do sell very quickly, but there are always many other properties in each location to choose from.

-No, we do not price properties or rental numbers on the website. Those come directly from the builders/sellers listing on our site and the property managers that manage the properties (which there are always multiple management recommendations to choose from). You are not required to use any property management team in any location. This choice is completely up to you on who to use for management.

-Most importantly, this is a normal buying process. You will have an appraisal on each property (as required from your lender) to ensure properties are priced appropriately. <1% of homes acquired through our platform have a low appraisal, and when that does happen the seller is usually very good about lowering the price for the investor. There are always appraisal contingencies as well. There are large national and regional builders that list their properties on our platform to include some of the largest names in building like DR Horton, Toll Brothers, Lennar, LGI, Century, etc. These builders provide wholesale pricing through our network that they do not provide to the general public allowing the individual investors to obtain wholesale pricing on new construction properties below market value. This can be as significant as up to $50K below market value.

-Lastly, please understand that there are many pms and other businesses we do not have on our site that are quick to jump in and make negative comments in effort to drive business their way. This is easily identified by those who seem to comment on every thread where someone asks about RTR spamming the forums with the same negative comments over and over again. You will also get DMs from competitors soliciting anyone that comments about RTR (good or bad). We've been told this over and over again from BP users.

-RTR has been on the BP platform for over a decade now and has hundreds of 5 star reviews for a reason. We are not perfect and neither is investment real estate, but we are always involved with investors to do our best to set them up for success and get deeply involved to find solutions with any individual that experiences issues throughout their investing journey, even if it's issues that arise from initial conversations before any investment has actually been made. We just need to be made aware of the issues.

We are more than happy to connect with anyone that has additional questions.

-To your investing success, Grant McMillan - COO RTR