Turn Key Rental Failure from Rent to Retirement

[Peter ONeill]

Hey Everyone,

Looking for some advice here. I wanted to get into real estate investing the easiest way possible and I figured using rent to retirement would be the simplest solution. 

Their projections showed a 17% yield with $789 cash flow for $75k down. 

I am over $100,000 cash into the deal and losing money, negative cash flow ~$200 a month. 

This is a new construction and so many things needed to be fixed by the property management even though they said everything would be fixed from the inspection report. They refused to provide pictures and said that it's just how it is.

The provided loan company was also terrible to work with. They were super pushy and had very outdated technology. Loan was instantly sold to NewRez which has been pretty good for a loan holder.

Any recommendations? Should I wait for the end the year and hope for rates to drop? Or should I just sell the property and take the loss? Is the better to take the loss in the next calendar year? 

I appreciate any advice!

Peter

First time home investor.

[Grant McMillan]

Peter,

Thanks for the details of your situation. RTR is here to assist you however we can, we just need to be made aware of the issues you are experiencing. We reviewed communication and we do not have any notification from you that you are experiencing issues. It's important to communicate with us so we can proactively be involved to assist you with anything you need. We understand Scott has spoken with you this morning already and that you have another call scheduled with him this afternoon.

Just for clarification purposes for everyone else reading this thread. You purchased a new construction property that had a $21,000 incentive on the property. Meaning you had $21,000 that you could use as a price reduction, cash back or rate buy down (or combination of the above). You chose to take the full $21,000 as a price reduction on the home, meaning you acquired it at a discount allowing for immediate equity. The numbers you are referencing on the pro forma shows that $21,000 being applied to rate buy down and a portion as cash back at closing. That was our recommendation of how to apply the $21K incentive. Buying the rate down significantly would have allowed for much better cash flow each month along with more funds in reserve from the cash back.

We did look through the inspection report from when you purchased the home a few months ago, and it appears the builder remedied everything that came up on the inspection report. We do not have any other details about management issues you are experiencing, but we are happy to look into this further with you to see how we can further assist. Scott will cover this on his follow up call with you later.

Again, we are here to help you however we can, but we just need to know about the issues you are experiencing. RTR was not notified about these issues until we saw this post on BP yesterday.

We look forward to working with you to review all details and help build a strategy to set you up for long term success.

-Grant, COO Rent To Retirement