turnkey property companies

[Fred Stevenson]

Hey everyone,

I just listened to Brandon Turner's webinar (it was awesome), and in his review of avoiding investor mistakes, he discussed the dangers of trusting a broker's pro-forma analysis on a rental property.  Any recommendations on how to vet and analyze these typs of pro-formas?

Thanks.

[Jonathan Twombly]

@Fred Stevenson 

Brokers get a bad rep sometimes, and sometimes it's deserved.  But good brokers are like gold.  Nevertheless, brokers are not in the business of owning deals; they are in the business of selling deals.  And like all other salespeople, it is in their interest to put the property's best foot forward.  This doesn't mean they are bad people, it just means that they have a job to do, and that job is different from yours as an investor.  You absolutely must learn to underwrite properties, and it will take some time for you to develop a sense of whether what a broker is telling you comports with reality.  Your starting point should always, ALWAYS be the actual financials from the property.  You always want to pay for actual performance, not someone's rosy predictions of the future.  Hope this helps.