My experience with USREEB - turnkey property
- Water was not on during the inspection. Dishwasher, Bath, shower, toilets could not be inspected. Toilets were dirty (apparently someone did their business and left a 'present', in both restrooms. Not a big deal, but I wonder if property showings are happening in current condition? Is it ready for rental/move-in according to USREEB?
- According to the inspection report, there are 3-4 layers of existing shingles under the newly installed roof. The roof is new and looks good on the surface, but all this added weight can't be good, especially in winter with the weight of snow/ice. I understand its easier/cheaper to slap new shingles on top of old ones, instead of tearing-off old roof and property installing the new one. Cutting corners in turn-key rehab is nothing new but in midwest, this could result in the roof collapse in the middle of winter. And access to the attic is closed shut, so no way to inspect the rafters and roof structure.
- Structure/foundation: Piers in the center of the house are made up of brick and rocks. Is it still acceptable? Floors in the house have multiple directions of leaning and noticeable slope on the garage floor. Most likely due to soil moving or settlement. Again, nothing new but no mention of these issues and no seller disclosures so far.
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Other issues like a broken window or leaking skylight are not big items, however, I did not expect to see this in a 'total rehab' property, 'ready' for the tenant.
I have been doing research on turnkey providers in Kansas City area, after talking to few people, visiting KC, driving around Independence, Raytown etc. areas and looking at few properties (from Bridge, McInnis, USREEB etc), I decided to move forward with USREEB. I will use this post to document my experience so far and update it in coming days.
Few key reasons why I decided to work with USREEB:
1. Good reviews and feedback from everyone on BP about USREEB, on how they handle property management and communicate well.
2. I saw two USREEB properties in person, one of them was in rehab. They were really doing a gut out rehab. Quality of work appeared better than other turnkey providers.
3. I am hoping to gain some equity in the purchase, i.e. hoping property will appraise higher than the purchase price. Usually, it is not feasible with newly renovated turnkey properties.
Now I have an SFH class 'A' property under contract with them. Property is 'complete', but no tenants yet. So far my experience with USREEB is less than ideal, but I am positive and going to give them benefit of doubt, at least for small issues.
a) I feel it is not easy to get information from them. For e.g. I still have not received the scope of rehab work and seller's disclosures after asking multiple times.
b) Similar turnkey providers offer 6-month or more warranty on the property, at least on the rehab work. USREEB will only give 90 day 'handshake warranty'.
c) USREEB suggested instead of getting my own inspection done, I can just review an existing inspection report. I agreed to review existing report, in addition to getting my own inspection done by an inspector I trust. I never got that existing report. It took them 2+ days to confirm the date for inspection of this vacant property. On the day of the inspection, the lockbox code did not work. After finally getting someone on phone from USREEB and trying around 15 different lockbox code (as provided from USREEB), the inspector was able to enter the property.
d) According to my inspector (I have met him in person and he has done other inspections for me) quality of rehab is questionable, along with several small issues. I understand Property Inspectors can be very meticulous and every small item is not a red-flag, however, here are few things that stood out :
I have already contacted USREEB and requested repairable items to be repaired asap for re-inspection. I am hoping they will be able to address all of these concerns just like they did for most other investors.
We are scheduled to close in 2 weeks and supposed to have tenants moved-in before closing. Let's see.
Mackaylee has been good at responding to emails and Kenna from property management was helpful when lockbox code did not work.
USREEB have more options in 'A' class neighborhoods (Lees Summit, Praire Village, Blue Springs etc) compared to other providers focused on B and C neighborhoods.
I know a lot of investors on BP speak highly of USREEB, so maybe I am over thinking and these are regular issues. Please feel free to share your experience and input, I am sure some investors will relate to these pesky little concerns. I will update the post as I get response from USREEB and make progress towards closing my first turn-key out of state investment property!