New OOS investor looking for Turnkey. Help deciding company

New OOS investor looking for Turnkey. Help deciding company

New York City · Member since 2018 · 161 posts · 75 votes

Hi guys, I'm a new investor trying to find the  and am trying to find the right turnkey company to work  with. 

I think the most important thing about finding the right turnkey company is finding a great property management team and worry about the area later. I came with a list (with commentary):

Memphis Invest - The golden standard. Property might be a tad more expensive but if turnover and repairs are minimal then I'm fine with that. Another plus is that they are in five markets going to seven. They also seem to have thrown out their requirement of buying two houses initially with them as well, which works great for me. I did the initial consultation with them and got preapproved by two of their lenders already but haven't pulled the trigger for part 2 since I wanted to research other companies first. Currently my top pick. Can anyone share their experience with them and help me decide which market I should invest in with them?

Smartlands(Ohio) - Interested in the Cleavland Market. The only "full" turnkey company I know of in the Cleavland area. Had an initial consultation with them where they promised to send me a list of their approved vendors as well as any current deals they have open for me to look at. It's been almost two weeks and I haven't heard back from them. I tried emailing the rep I talked to a few times and no response. I'll just chalk it up to me giving them too long a time frame for my purchase(I told them 3-6 months at the time. Now I've made up my mind to 1-3 months though) during my initial phone call more then anything else, as there customer service reputation on these forums seems to be pretty stellar.

Holton Wise(Ohio) - The whole reason I am interested in the Cleavland market thanks to @Jameswise blog and his youtube videos. Holton-Wise does not seem to be a "Full" turnkey company however. They seem more like a realtor with a PM and renovation arm. They seem more like a company I want to work with for my third or fourth deal, not my first or second. 

JWB (Florida) - Great reputation, sample of properties given is by far the more expensive out of any companies I've seen. Cash flow seems really poor. Expenses seem really high. It seems that the only real play is Appreciation for these Florida houses? Or maybe just an alternative to investing in Treasury/Fixed income interest rate products if an investor is paying for everything in cash. Am I missing anything?

Spartan Investment(Alabama) - Their biggerpocket presence seems good. Alot of people on this forums  vouched for @Clayton mobley and Spartan invest which makes me feel great about possibly investing with them. I just have two issues with them. The issue I have is it seems that Birmingham in general seems to be declining. Population is decreasing and has been for DECADES.  Also there is a recent thread about several Spartan investor not being able to evict their tenants due to "sheriff backlog". I believe one guy has had this issue since June and it still hasn't been resolved yet. That being said, that sounds more like an area issue rather than a Spartan Invest issue, but still, it's in the area that Spartan invest are in. Anyone has any local knowledge of the Birmingham area know where the Sheriff department has such a terrible backlog of evictions as of late?

Turnkey Investment Properties(Memphis and Little Rock) - @Alex Criag seems to come highly recommended on this Biggerpockets. I've even seen @Chris Clothier recommended his him on several occasions! @Alex Criag's company seems to work in a rougher part of Memphis than Memphis invest. Does anyone have any experience working with him and his team? I know some of their investors had weird experiences. Was that due to the area that @Alex Criag invest in being rougher  or was it more bad luck more than anything?

Buy memphis Now! - Comes highly recommended again by the BP forums. From what I can gather either uses @Chris Clothier PM company or @Alex Criags. Seems to be in the same neighborhood as @alex Criag as well. Any benefit of using @Curt Davis over @Alex Criag or vice versa? Well, other than wanting to invest in multifamilies and in Little rock that @alex Criag offers?

Can anyone throw in their suggestions, experiences, and critiques on my though process?

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Alex CraigBusiness Member
Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
7y

@Dean Letfus I agree with a lot of what you are saying, but disagree with the 2 bathrooms are always easier to rent.  In some areas, it is a must such as Barlett, Hickroy Hill, 38125, 38119 and a few others, But in 38117, 38118 and 38111, it doesn't make a difference. We rent houses in those zips all day that are 2/1, 3/1 and 3/1.5 all day and quickly. My best rental is a 2/1 in Colonial Acres that I have rented twice within 2 days of being vacant for $1,025. Off the top of my head, I would guess 1/2 of my portfolio is 2/1 and 3/1. So long as these are owned in the right area, they rent just as fast. You may disagree, but I have first hand experience as an owner of these and manager of almost 700 properties that says these do rent just as quick. Again, the key is the right area and most of the time, it is inside the 240 loop.  Another reason I love owning 2/1's and 3/1's is less wear and tear because typically less people living in the homes, less maintenance cost because of one less bathroom (plumbing is the # 1 maintenance call we get by far), roofs are smaller to replace, HVAC units are smaller, turn cost is smaller--everything about a 2/1 and 3/1 is cheaper to operate, thus why I love that 2/1 that I get over $1,000 a month for.

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  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @Chris Clothier Thanks for getting back to me! I'm just looking at various new properties you guys sent over. Knocking the vacancy and maintenance to 0% actually made my Monthly cash flow (the gross number) go down rather than stay the same, which is what I assumed it should do. 

    I will send you a few proforma I received and show you what I mean. Please forgive me if I miss something or what I'm seeing is a result of a brain fart. 

  • Rental Property Investor · Germany · Member since 2017 · 74 posts · 22 votes
    7y

    Hi @Wei Jie Yang,

    You might consider creating your own Excel sheet to calculate these things. I have my own so the only thing I really need to know is cost of the property and rent. (You can just look up county records for the taxes yourself) Now you can include your own numbers for maintenance, vacancy, capex, etc in a format you completely understand. If you create it, you’ll be intimately familiar with how the formulas work when something weird happens like you’re describing now. This will also help you compare properties from different turnkey companies who use different spreadsheet formats. When Memphis Invest sent me their pro forma, I just took a couple key numbers from it and inserted them into my own spreadsheet. I’ve set it up to easily change any number so the entire sheet then recalculates numbers (e.g., a change in down payment, interest rate, insurance, etc). Memphis Invest’s spreadsheets definitely have this capability, but like most people, I’m just more comfortable looking at something I created. There’s also a great peace of mind when their product matches your own! Happy to send you the one I created if you’re interested!

    Cheers!

    Eric

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @Eric Chase I do have a version of my own, that's why I'm so weirded out that ever MI proforma that I've got had the gross cashflow number go up rather than down when I increased maintenance % and I can't figure out why. The MI proforma that you gave me didn't have this problem, but the formula's are the same.  This is more for me to figure out why the set of spreadsheets I got are like this more than anything.

  • Nathan BrooksBusiness Member
    Lender · Kansas City, MO · Member since 2012 · 403 posts · 188 votes
    7y

    Appreciate you @Chris Clothier and the kind words. We also look up to YOU sir, and your business. Wish you the greatest of success as well.

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  • Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    7y
    Originally posted by @Wei Jie Yang:

    @Eric Chase I do have a version of my own, that's why I'm so weirded out that ever MI proforma that I've got had the gross cashflow number go up rather than down when I increased maintenance % and I can't figure out why. The MI proforma that you gave me didn't have this problem, but the formula's are the same.  This is more for me to figure out why the set of spreadsheets I got are like this more than anything.

     Maybe you should turn the positive number to a negative number

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @Account Closed That does work. I just use Memphis Invest's pro forma's as a quick look and I have one of my own to compare investments. 

    That  being said though, I am trying to figure out why that is happening, and why it's happening with every single Memphis Invest proforma that I got.

  • Rental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
    7y

    @Wei Jie Yang I have found the calculators here on BP work really well. Takes just a few minutes to populate and you get dependable results. I agree that you could create your own spreadsheet to make sure the formulas are correct.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @Axel Meierhoefer I've actually been holding off on that as long as humanly possible since I only get 5 shots on it and I'm still a penny pinching cheapskate (working on it though).

  • Rental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
    7y

    @Wei Jie Yang OK, got it. The annual membership is really affordable and all the perks easily pay you back, especially if you plan to develop a portfolio.

    You are basically telling me that you want to cook a gourmet meal but you are not willing to spend money on the ingredients and hope that your guest will not taste the difference. Maybe you should rethink that approach.

  • Member since 2018 · 46 posts · 31 votes
    7y
    Originally posted by @Axel Meierhoefer:

    @Wei Jie Yang OK, got it. The annual membership is really affordable and all the perks easily pay you back, especially if you plan to develop a portfolio.

    You are basically telling me that you want to cook a gourmet meal but you are not willing to spend money on the ingredients and hope that your guest will not taste the difference. Maybe you should rethink that approach.

     The Memphis Invest pro formas use the BP calculator I believe.  Sounds like there is an error in the coding, but should be very easy to fix.  I manipulated and changed up the Memphis Invest pro forma easily when assessing various properties, and if any cell or portion of the chart isn't doing what its supposed to be doing, should be easy to just pop in the right formula if anything is messed up for some reason (though they were fine when I was reviewing them 2-3 months ago).

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @David Katz I do have a version that I fixed up and that I am using to evaluate individual properties. That being said, I was just confused as to what's causing it, since I believe the formula is actually correct, I'm just getting incorrect numbers from it. 

    I did end up figuring it out on my own (for the 2nd time actually since I already made a template that corrected the issue, I just forgot what it was!) 

    I did PM @Chris Clothier and  I believe he has solved this particular issue I was having as well. He offered to have a GotoMeeting with me where he can explain the issue and the fix.  I have not replied (I know I should) but I am declining since I figured it out.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Well, first slight bump in the road with Bridge Turnkey. Just got word from my lender that apparently when the appraiser came, not all the renovations was done yet and the appraiser has to come back, for an additional fee of course, even though we already rescheduled precisely because of this issue already.

    Haven't gotten any word back from Bridge themselves if there will be any resolution to this issue, but it's literally only been ~ 20 minutes since this issue has been bought to my attention so I'm holding out hope they'll cover any additional fees.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    @Nathan Brooks just got back to me and said Bridge would cover any possible fees that comes up with this issue. So on my end, I'm satisfied. I have nothing to complain about with Bridge. Bridge has definitely  been great all around.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    With the new KC house I am investing in the Ruskin Hills (not heights) area. I think what I'm getting is a house in the Frayser(38127) equivalent for Kansas City. I even got the same lines about the neighborhood from Bridge that I did from Midsouth Homebuyers when I asked about Frayser.

    That being said though, companies like Midsouth, Crestcore, and Memphis Buy and Hold makes questionable working class areas work for investors (at least that's their reputation anyway). There's no reason for me to think Bridge and Voepel won't do everything in their power to make this work, as their reputation is stellar as well.

    I'll keep everyone up to date in regards to what's going on. If this goes well I'll probably be buying from someone again around June or later.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    I also found out this from my lender. Fannie/Freddie changed guidelines regarding title and loans. If you want 10 loans for you and 10 loans for your spouse then don't put your spouses name on title. They are now counting the title against the spouse even though the spouse is not on the loan. 

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Closing has been delayed by at least a week due to mistiming of the Appraisal. During the scheduled appraisal a lot of the repairs were not completed yet. We had water seeping in thru the cracks in the basement floor, cracks in several basement areas, an open electrical outlet and other smaller issues. That being said the bathroom and kitchen seems to be immaculate and the appraisal came right on the money.  

    Once the appraisal and pictures were received Bridge immediately(~30 minutes after the appraisal was received!) sent someone back to the house and took pictures to confirm those were NOT issues any longer. As a result of the bad timing though, the underwriter has requested a structural engineer to look at it and the appraiser go back into the house to confirm everything has been done before the deal can go thru. 

    I feel a bit bad for the team at Bridge because they have been great throughout this entire process and has been rapid in dealing with any issues that pops up, and this happening will increase their holding costs. But these steps is protecting my investments so I can't say I'm too upset. :)

  • Nathan BrooksBusiness Member
    Lender · Kansas City, MO · Member since 2012 · 403 posts · 188 votes
    7y

    @Wei Jie Yang we are on it sir! And will definitely make sure you get this ALL the way to the finish line. We're always here, always making sure things are correct ... appreciate your patience and excited for you to get this first one CASH FLOWING!

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  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Just an update on my situation.

    I currently have two houses under contract. One in KCMO with Bridge Turnkey and one in Huntsville Alabama with @jared Garfield 

    Both properties seem to be killer in terms of Cashflow, and the Huntsville one might have some decent equity since I am not buying that one Turnkey, although Jared does run a turnkey business, but I am getting a new roof and four year old systems from a motivated seller.

    Overall that makes 4 houses in one year and that hit my cashflow goals alot quicker and for a lot less cash than I expected. I want to try for #5 and possibly #6 as well, but I am not sure if I should stick to a turnkey route (which has all worked out REALLY REALLY well) or try to buy a semi distressed property to renovate a bit.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Bridge and @shane Clearly and @Nathan Brooks  has been amazing every step of the way and their properties are amazing deals.

    ROI Turnkey has also been amazing. @Jared Garfield is ridiculously easy to get a hold of on facebook and will take the time to talk to you about everything at all times. The only downside with them though, is there is definitely a bigger communications issue with anyone that is not Jared or Tom then with Bridge or Memphis Invest. I believe that's mostly due to them being a much smaller outfit, and going thru some personnel changes though.

    Overall very satisfied with everything so far. Should close Alabama by next week. Should close Bridge in 2 to three.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Also, I don't know if it's due to lack of experiences and undue expectations but I the inspector I had for the Alabama home was terrible. Didn't look at the roof at all, even though you can see it peeling off from pictures. No ages (like beginning/middle/end of life) or any detail of any of the mechanicals like HVAC or electrical or anything. It looked like a report from someone that just did a simple walkthru.  Square footage estimate he gave was half the size of the actual building (1500 square ft vs 2900 square ft). 

    I thought it was terrible overall, although I only have experience with three different inspectors in other markets, so my expectations might be skewed. 

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Closed on the Alabama home yesterday. PM will go on site and market the property tomorrow.  This will be the first time the PM and the agent-seller does not have an integrated process since I bought this using ROITurnkey as an agent, not a turnkey company. Also, the original PM provider died before I closed so they switched up PM's so I guess that had something to do with it as well.

    Will close on another property from Bridge Turnkey today. That house is already rented and doing well.  Will keep everyone updated on my situation.

  • Nathan BrooksBusiness Member
    Lender · Kansas City, MO · Member since 2012 · 403 posts · 188 votes
    7y

    We have loved working with you too @Wei Jie Yang! Appreciate you and pumped for working with you for many years sir.

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  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    When I began, I thought the most properties I was going to get was one a year but WOW has my plans changed completely! I have so far closed on four properties, and put in an offer for another in Huntsville Alabama with  @Jared Garfied's representing me as an agent.  

    Biggerpockets and real estate investing is simply amazing and my very modest goals at the beginning of the year has completely been surpassed. Thanks everyone for your help and patience.

  • Rental Property Investor · Sherwood, AR · Member since 2019 · 47 posts · 37 votes
    7y

    Hey, Great Thread on your Turnkey experience. What does financing look like for these properties. Conventional Loans? 20% down payments or is there a way to do turnkey for low or money down? I have money to invest, but am considering BRRRR vs Turnkey because I don't want my investing to be limited to the number of down payments I can cover.

  • New York City · Member since 2018 · 161 posts · 75 votes
    7y

    Hi @Damon Cluck! Sorry it took so long to get back to you. Been meaning to but I forgot. 

    My first property with Memphis Invest I put down 20%. My next 4 I put down 15% + lump PMI. Saved me 10's of thousands and allows me to buy much more than I would normally be to. Only works for SFR though.

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