Experience working with Norada?

Question

Hey all!

Would love your feedback on first hand experience working with Norada Real estate: http://www.noradarealestate.com/ ?

I see some interesting deals and want to validate the company through investors.

Thanks!

Yochai

Anton Ivanov · Answer

@Yochai Paz

I've bought 4 SFRs through them a few years ago and was very happy with the outcome. Feel free to PM if you have specific questions.

Chris Seveney · Answer

@Deborah Van if someone who is charged (and I believe reached a plea deal) with anything related to investor money for an unsecured note fund only makes you hesitant to invest in their other offerings and not 100% outright pass on it, that to me is scary.

Melanja K Jones · Answer

Beware of Norada and their recommendations.

I live in Southern California and bought an investment house in the midwest through their recommendations.

Several takeaways-

1. the ProFormas are complete fiction, listing 5-10 percent for vacancy and repairs and on the flip side, steady growth on appreciation and rent increases. One tenant turn after a year and a half completely destroyed all cash flow for those two years and the next 5 years. When the initial tenant broke the lease (after not paying rent for a month and a half) the PM advised me to lower the rent instead of raising it as advertised in the initial proforma.

2. Property management. I cannot stress enough how important a trusted PM is out of state. Norada told me over and over that this PM was "one of the best in the business." However the tenant was constantly late with rent, the lease was written so that the PM kept all late fees (thus incentivising late payments), and after being assured that this was a good tenant on renewal, 6 months later I was handed a $3500 repair bill for the initial tenant turn. Then the website for the PM company crashed just as my property was to be listed for rent and their main point of contact left town. Paperwork and billing was poorly explained and often incorrect. At that point I had enough and moved my property to another company, first having to pay a $500 early termination fee and an imaginary cleaning fee to ransom my property. The new PM found several other essential repairs that had not been handled by the Norada approved company (leaking pipes, non- grounded electrical outlets) so there was another huge repair bill. The new PM did rent the property for more money. Three months after I left the first PM,  I started receiving emails that they were being investigated for fraud. Looking back on the sketchy documentation for the initial repairs I feel was scammed. $780 to repair one window? In a house that only rents for $1095? Clearly Norada does NOT vet the out of state managers and I cannot emphasize enough how stressful and difficult this has been because of that. Every month there was some kind of disaster

3. Mis-represenation of tax benefits. As I was exploring the idea of buying a property through Norada, they extolled the out of state tax benefits because I live in a high income tax state. THERE ARE NO TAX BENEFITS UNLESS YOU ARE ABLE TO PROVE TO THE IRS THAT YOU ARE SPENDING MORE THAN 750 HOURS ON REAL ESTATE. For most people you will only save a little money on any PROFITS if you have a loss the first year. If the property loses  money, you just.. lose money.

4. Lack of a exit strategy. So now what? Now that I have owned this property for almost 2 years and lost thousands and thousands of dollars, what is the next step? Norada has no guidance or infomation on that.

I was really excited to buy my first investment property because of the high price of entry on the coast but I would have been better off taking that money and buying eggs or lottery tickets.

David Kanarek · Answer

see Facebook group:

Norada Capital Default Notice:

If you are one of the investors, please see Facebook page with agencies and links to file complaints !

Account Closed · Answer

Norada would be my first call if I was investing out of state.  However I’m happy investing locally.

Han Oo · Answer

@Tyler Wittwer Sorry to jump in this thread. I am do research on Turn Key companies and I found 3. Memphis Invest, Norada and Bridge Turnkey. I would like to hear more about experience.

Marco Santarelli · Answer

Hi @Tyler Wittwer -- I just read your post here (I was out of the country recently).

I just texted Michael to ask him about his search for the type of properties you're looking for.  He said he's been trying to find property that met your criteria but unfortunately there are cycles to what's available and it's been super tight for what you want.  One key partner we work with that might work for you hasn't provided us with inventory for 3 weeks now.  It's not for a lack of trying.

I've asked him to try working some other channels to see what we can put together for you.

Sorry for any slow communication; it's a crazy time in the markets and the low/tight inventory has made it rather challenging for everyone in the industry.

I'll follow up with Micheal more tomorrow.

Feel free to contact me anytime!

Thank you,

Marco.

Marco Santarelli · Answer

Hi @Tyler Wittwer -- Welcome to BiggerPockets.

I see you made contact with Michael Ristau back in January/February.  I'd reconnect to discuss your needs and what we've been able to help other investors with over the last 14+ years.  We can certainly connect you with past clients as well.

Of course, feel free to reach out to me anytime here on BP or PM.

Continued success!

Deborah Van · Answer

@Melanja K Jones that's just awful. I'm so sorry you had to go through that. Are you still investing? Experiences like this remind me to be acutely aware of all the moving pieces in real estate investing and remember to always do my own due diligence of the companies I plan to work with. The people I've met so far seem very nice, but unfortunately, I too have learned that trust is earned, not given. I sincerely wish you all the best.

Experience working with Norada?

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