Rental Property Investor · Rio Rancho, NM · Member since 2013 · 314 posts · 816 votes
11y
Hi Joseph,
I live in San Diego and I bought 2 SFRs I found through Norada earlier this year – 1 in Atlanta GA and another in Birmingham AL. Overall, it was a very positive and smooth experience. Marco, who is the owner and the person you will most likely be working with, has many connections throughout the US and is very knowledgeable about the turn-key acquisition process.
Although these were not my first RE deals, he insisted on helping me through the entire process to make sure the deals went as smooth as possible. Since it looks like you are a beginner investor, you will find that extremely helpful. Be sure to ask for Marco’s property purchase checklist.
Now with that said, you need to understand what turn-key investing is and what it isn’t. What you should get is a freshly rehabbed property with a tenant in place. You will end up paying market value, but you will not have to deal with finding and rehabbing the property yourself.
At the same time, not all turn-key properties are worth buying. You need to start by finding a market (state, city) that fits your goals and preferences. Different markets have different economic fundamentals and demographics. The Norada website has descriptions and fundamentals for each market they operate in, which is a good place to start.
After you find a suitable market, you need to determine what your criteria for the property is (price range, neighborhood quality, size, age, etc.). It will be much easier for your to find suitable turn-key properties if you do the above instead of just browsing everything that’s available.
To sum it up, treat a turn-key acquisition as you would any other purchase. Don’t assume that the homes you are looking at are perfect. Double check all of the numbers until you know exactly what you are buying.
Feel free to reach out if you have any specific questions.
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.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
11y
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.
It exists just probably very volatile so for all intensive purposes you are probably right. Good luck selling to a cash flow buyer with that reasoning though.
New to Real Estate · Cardiff By The Sea, CA · Member since 2016 · 49 posts · 29 votes
10y
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.
Rental Property Investor · West Caldwell, NJ · Member since 2014 · 66 posts · 18 votes
10y
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.
Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
10y
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!
Investor · New York, NY · Member since 2016 · 3 posts · 0 votes
10y
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?
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?
Financial Advisor · Glendora, CA · Member since 2015 · 209 posts · 94 votes
10y
@Marco Santarelli, Just wondering what your opinion was for the Atlanta market. I just bought some there. It seems like Atlanta is always on the down low and doesn't get the hoopla that Denver, SF, LA or other hot markets.
Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
10y
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.
New York City, NY · Member since 2016 · 470 posts · 348 votes
10y
@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?)
@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.)
Property Manager · Lucknow, Uttar Pradesh · Member since 2016 · 3 posts · 2 votes
10y
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.
Investor · Fairhaven, MA · Member since 2016 · 100 posts · 88 votes
9y
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.
Mishawaka, IN · Member since 2016 · 25 posts · 6 votes
9y
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?
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.
Investor · Mount Bethel, PA · Member since 2013 · 45 posts · 29 votes
9y
@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.
Rental Property Investor · Miami, FL · Member since 2016 · 72 posts · 26 votes
9y
@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.
Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
9y
Hi @Account Closed -- 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.
Canton, MI · Member since 2016 · 112 posts · 47 votes
9y
All,
I bought a Jacksonville SFR ( a new construction) through Norada introducing me to JAX investments.
Since it was a new construction, All Norada did was to introduce me to Jax investment. There was not much interaction from Norada..
The project was delivered end of June and Tenant placed with in 3 weeks.
No issues so far, except Suncoast PM is a little slow in responding to my queries.. apart from that no issues..
I am not sure this feedback helps anyone, but putting out there..