I have recently purchased 3 turnkey properties from 3 different companies 6 months ago in Indianapolis and here are some updates. Also, I have a really large problem with one of the vendor/property and I desperately need some advise.
1) Pinnacle Investment Properties (Mike Darrigo) Purchased in May 2018
I purchased their "B+" neighborhood property and I inherited the tenant. During inspection, we found issues and it was addressed before closing. Mike patiently explained all of the details during the process and the property is performing as discussed from the start. Thus far, all of the transactions from purchase to closing and transition to property management (PARC) was really seemless. This is what I imagined in a turnkey property. Stress free experience! If anyone is looking for indianapolis turnkey, I highly recommend Mike Darrigo!
2) Real Estate Done 4 U (Michael Drew)
I purchased a "B" neighborhood property and I inherited the tenant on this one as well. I believe I didn't purchase a typical houses they offer. The property manager is Bricklane but i think they changed the name to Home river. I inherited a so-so tenant but I was notified beforehand. The house was not in good condition but I received a credit for the future turnover cost. (hopefully it is not more than the credit). The whole transaction and communication though out was not perfect but it went through. Because the house was not in good shape, there were some high repair bills. Thus far, its been more headache and expenses than I anticipated but its going okay.
3) Jason Hartman Network / Realty Wealth Advisor- Zuluscape.
I purchased a "B++" neighborhood property through Jason hartman network. The turnkey company is realty wealth advisors and their internal property management company is Zuluscape. The property has been a total chaos from the start. I purchase this property due to its features, built in 2004, nice neighborhood, and etc. The purchase price was higher than the other properties and had lower rent to purchase ratio (0.9). But from reading all of the post on biggerpockets, this property seemed like a safer choice. I inherited their current tenant. But it was a bit strange because initially property manager told me it would be vacant and the house will be "updated" but during the closing process they noted that current tenant decided to stay. So from starting 1st month, the tenant didn't pay but they paid a month late. For the next 4 months, I had issues with communication with the property management on the status of the rent. I would receive rent payments randomly and property manager keep suggesting for eviction. Also, this company's contact structure is abit complicated. I would need to talk to 4 different person for different issues and I never felt like anyone understood the complete picture. The typical conversation would end with "I will get back to you" but they never do... I usually end up contact them back after a week later for the status. I also had couple of repair issues starting the 2nd month of about $585 but despite having a 1 year warrantee and having an inspection done 2 month ago. I requested if they can cover the repairs since I just purchased the property and they said no because I didn't purchase this property through their internal network but through Jason hartman. During October, we started eviction for the tenant and we took possession of the house about a week ago. (this process also took 1 month longer than PM advised). So now, they sent me a turnover renovation quotation for $10900!! This is not including 2 month of loss of rent (so far), attorney fees for eviction. lease turnover cost, and etc.. I tried contacting Jason hartman network but my advisor left for another company. I dont know what to do.. please help.
Looks like two are what you expected and one needs maybe a second bid and or move to the property manager you have good working relationship with.. but you did say they were wanting you to evict right away..
I suspect Jason will go to bat for you on this.. if this is something that the provider should be warranting.
Yikes- the first two sound like textbook "Turnkey", but the third sounds like anything but...
Sounds like you've got possession now, which is a great first step. Next step is get this property under control quickly, including making sure it's secure. You also don't want to compound your problems by having pipes freeze or other issues that you can prevent.
I don't know the detailes behind what you were sold, or promises they made, but it sounds like they're not doing anything to make this right for you. Get a PM in there that you can trust, get the property performing, and then go back and review everything from the original deal with your attorney.
Hi @Jay Zoo - glad to see that tenant is on the way out, let’s look at the fix up cost issue today. I asked Carrie to reach out to you just a moment ago.
Thank you for your reply. I previously spoke to Mike (Parc management) about the taking on other houses but I believe Parc only manages their internal inventory and doesn't accept management contracts only. Yes, I ran the numbers again with the renovation expense and at perfect scenario, it looks like it will take 3-4 year to breakeven on this project, most likely in 5 years or more.
Thank you for your reply. For my previous issues, my advisor at Jason Hartman did try to help but ultimately nothing really happened. In hindsight, it made the communication even more complicated trying to relay all of the messages between each other.
Thank you for your reply. I will request my PM to make sure that the property is winterized. I will check with my attorney if this can be resolved legally.
@Jay Zoo well I know Mike personally I have been on his pod cast.. and I know Jason personally and have worked with Carrie in his office extensively over the years.. I would give them a chance to jump in.
I don't know the other company though so no opinion one way or the other..
other than to say your relationship with your PM needs to be tight in my mind.. and if it was me I would keep all three props at one place.. seems to me would be easier to stay on top of communications.
Thank you for reaching out. I sent you my contact info.
Thank you for your reference. I would like to merge all properties into a single PM eventually but I wasn't sure which PM was reliable. I read extensively on this forum but I still couldn't decide. I read your numerous posts on turnkeys that PM is probably the most important factor. So, I purposely bought from different turnkey companies so that I can see firsthand which PM was reliable.
My pleasure, @Jay Zoo . I sent you my direct line #.
@Jay Zoo thanks for the positive comment. I'm glad It's going well with ours. I'm sorry that the other one isn't doing well. Have you spoken to @Jason Hartman about the fact that RWA won't honor the warranty because you bout it through the Platinum network? @Jason Hartman runs a good organization and I suspect he would want to help resolve this for you. You might want to reach out to them and see if they can help. I'm going to send you a DM regarding property management.
Thank you all for your sound advise. I wanted to share some updates on issues I had with RWA and Jason Hartman Network. I spoke with RWA and Jason Hartman network teams for the past 1-2 weeks and they have alleviated most of the costs of the renovation. I am still responsible for portion of the renovation cost and vacancy costs but it is much better situation than originally proposed. PM offered to initially cover the renovation cost and deduct the balance from future rents so I didn't need to come up with additional funds. PM also offered to waived the new lease up fees for the future tenant.
I also wanted note that Jason Hartman's team, both Jason and Carrie, really took personal attention on resolving this issue and I appreciate their effort and time on resolving this issue. I was previously discouraged on contacting them for help as noted above but I don't think I could have untangled these issues without their help. We are starting the renovations this week and hopefully the have a tenant in shortly.
Now that over a year has passed on this issue, could we get an update of how things worked out and the current status?
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