Norada Real Estate?

61 Replies

@Kyle Scholnick

I will say what I assume the real answer is though I don't think anyone who had something to sell would say it. Like in every market there are informed investors that want to dig into the numbers and much less informed investors who typically buy the headline. 

For these investors it is all about meeting predefined conceptions especially if those are reinforced by other market participants (this is also known as you have to play the game). So if most TKs are low balling and you don't low ball you lose out on these people that want to know how big the cap rate is and how much of a headline return they can get. TK is a business and the things you are talking about are marketing plain and simple.

Now to his credit @Marco Santarelli

Has told you that there are additional estimates he thinks may be prudent to make where as many will simply tell you some people use other numbers, the numbers are not their strong suit or you should focus more on other things, etc. so obviously the numbers that are the headline leave a little out. 

@Jay Hinrichs

So what companies are taking the other side of that cash flow is all that matters trade and focusing more on what others are not? 

To what extent do you think they risk overexposing themselves with the significant rise in values in many of the markets where something like that would work? 

There are also a few people focusing on revitalization that I think is the best of both worlds though with most of those areas up already its tough to know when the rise in prices is too much too fast or just the beginning for that area or maybe the surrounding areas that are close. 

I am not sure a cap rate exist on one single family home with no history. If you could get the previous landlords numbers that might help. It is just a guess today. Many times these are negative caps with one eviction, or vacancy or strip out. It really is speculation. You  factor and minimize the risk with location selection and management. The cap rate will be the last thing you find out later.

I just started working with Norada to buy a rental in Memphis.  Thank you for all your posts.  I'm new to RE investing and every bit of knowledge is a great help.  Sounds like I'm with a great company.   Good to know.  For me personally, this is a buy and hold.  I'm not expecting much appreciation.  I'd like to have several of these homes as part of my financial freedom plan.

I've contacted them several weeks back and spoke with one of their counselors briefly. The individual I poke with asked me when would be a good time to contact me back to further go over a number of things. I provided him a pretty liberal availability window and never heard back from him again. Some people may of had a good experience with Norada but from my own first experience, I'm not too fond of starting a relationship on this note.

Hi @Dmitriy P. -- thanks for the feedback.  I'm not sure what happened as we have software systems and processes in place to prevent calls and inquires from getting lost.  Regardless of what happened, I want to apologize and let you know that I spoke with Ron about it this afternoon.  He called and left you a message.  He will try you again tomorrow.  Thanks kindly for your understanding!

Just curious as to what the typical returns are for the deals with Norada Real estate? Are there any fees and does these investment locations have any equity upside or is it just cash flow from rentals?

Disclosure: Founder

Hi @Edward G. -- Good questions...

1.  There are NO fees.  We've never charged clients a single penny.

2.  Returns vary by market and the neighborhood.  Therefore, "typical returns" are local or hyper-local in nature.  Here are some examples based on our inventory as of last week:

Cash-on-Cash Returns (based on a 30-year fixed at 5%, 80% LTV):

  • Atlanta 13.2%
  • Birmingham 14.1% 
  • Chicago  n/a
  • Dallas 10.8% 
  • Houston 12.4% 
  •  Indianapolis 13.2% 
  • Jacksonville 10.3% 
  • Kansas City 15.3% 
  • Memphis 17.0% 
  • Salt Lake City 4.1% 
  • San Antonio 9.2%

Keep in mind that these are only the COC returns. Your Total ROI will be considerably higher once you've calculated your loan amortization, appreciation, and tax benefits from depreciation

3.  Equity upside is also market and neighborhood based.  Our properties are is one of two types of markets -- linear and hybrid.  The first will give you slow and steady appreciation that keeps up with inflation.  The hybrid markets have more appreciation potential, and are therefore a little more cyclical in nature.

All this information is posted under each property on our website.

The real question is what are you looking for in your portfolio?

Continued success!

I like the Atlanta market.  Been there for many years but inventory has been tight lately.

The other markets you cite get a lot more attention because they are cyclical markets and see larger price fluctuations.  They are also far more expensive.  Not great for buy-and-hold investors looking for better returns.

Continued success!

@Yoochul C.

@Marco Santarelli I assume those are Year 1 numbers with low repairs / CapEx assumed bc the property was just rehabbed. I assume by Year 5 the cash on cash returns would actually decrease as your maintenance / CapEx costs rise significantly? (unless you've been fortunate enough to see monthly rental income increase by $200/mon over that 5 year period in order to offset your rising CapEx & maintenance expenses?)

Originally posted by @Eric P. :

@Marco Santarelli I assume those are Year 1 numbers with low repairs / CapEx assumed bc the property was just rehabbed. I assume by Year 5 the cash on cash returns would actually decrease as your maintenance / CapEx costs rise significantly? (unless you've been fortunate enough to see monthly rental income increase by $200/mon over that 5 year period in order to offset your rising CapEx & maintenance expenses?)

Yes sir, those would be first year numbers across the board, including vacancy allowance and maintenance & repairs. CapEx would be amortized over a longer period of time. (BTW -- our website allows you to change all income & expense figures to run your own scenarios. Click the Orange Analyze button.)

I haven't worked with them but my friend has been working with them and the response from my friend was outstanding in terms of honesty and reliability.

I haven't purchased a property with Norada Real Estate, yet, but I thought I would at least add my experience so far with Ron Manabat.  I had a nice, extended conversation with him about my investing goals and how well they aligned with what Norada offered.  At no point did I feel he was pushing me to work with Norada, but he did present a nice value proposition in terms of having a trusted/experienced partner.  Also, I give him kudos for observing that I already have some experience owning passive sources of income (its something I forget to mention and that other providers often don't ask about... when all goes well on a passive investment, I guess it is easy to forget to mention!).

Bottom line - talking with Ron made me much more likely to choose to work with Norada, and hopefully I'll have follow-up posts on an actual property purchasing experience sometime.

Here is the real question to ask,

Do they stand behind their providers? Meaning, when you buy a home, do they guarantee that the provider/PM is legit? Or do they collect their marketing fee and move on, leaving you to fend for yourself?

Disclosure: President

@Brian Naumann -- Good question!

Yes, we always sit on the same side of the table with our clients.  We are agnostic, so we are not "married" to our markets, providers, managers, inspectors, etc.  In fact, last year we fired a couple of our local providers and property managers.

Also, our clients tend to purchase multiple properties over time (short and long term), so they are repeat investors who like to work with us because of the value we provide, and the unbiased counseling we offer.

Hope that helps.

Continued success!

@Andrew Frishman 

I bought my 6th unit (1st with Norada) in April. Too soon to say long term but buying was a breeze and so far I have not had a single expense except for management. This makes it easy to build up a quick cash reserve for when expenses/cap ex/turnovers do happen. I planning on buying at least two more from them by the end of the year.

@Marco Santarelli Thanks for participating in the forum and addressing investors' concerns. I would just like to add on to what @Brian Naumann asked and you responded; What happens to the investors that invested with a not-so-good provider/manager? A concern I had when I drove up to Tampa to meet with the local provider was whether or not this provider was a ' Norada-seasoned' provider. I believe the Tampa local provider had just been working with you for a short time and with that, there's an inherent risk that this provider may turn out to be a bad egg.

On a side note, does Norada work with investors that are interested in rehab projects? For example, instead of purchasing once tenant-ready, I'd purchase at distressed and use Norada for rehab and PM.

Hi @Yanier Au -- Good to hear from you.

That's a good question.  Every provider is new at some point.  Although we do an initial screening and due diligence to vet them, ultimately we need to see how well they perform with our clients.  Fortunately, we've done a number of transactions with them and aside from a few minor bumps in the road they have been quite good.

To your second question, we tried the "turnkey whole sale" offering but we didn't get a lot of interest. It's also a little more complicated as there are many more moving parts for the investor who's buying.  And with many of our markets being hot there is more limited inventory to be able to offer this now anyway.

Thanks for the question.

Continued success!


I have talked to the guys on the site and have analyzed some of the deals they have. 

I'd recommend them if you are looking to do turn key rentals. 

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