Feedback on RentToRetirement and Zach Lemaster

63 Replies

@Geodel Isip

If you are talking about conventional mortgages you can have up to 10 at one point in time.  If you have a spouse or partner that finances the properties individually then you can have up to 20.  Basically each person can have 10 at once.  Keep in mind that is just for your conventional loans though.  There are all sorts of other lenders out there where there is no limit.  We've used portfolio loans where we had 6 properties under one loan.  We've been investing in RE for about the past 8 years, but really the past 5 to 6 is when we started to have a more strategic approach in building our portfolio.  In the early couple of years we managed our own rentals which didn't go so well...

Hope I answered your questions.  Let me know if you have any others.


 

@Diana Jing I wanted to check how the properties yo bought from Rent to Retire are doing now. Are you getting the CoCROI that the initial deal analysis showed? How much work do you have to put (if any) after buying the property? Any problems or challenges so far? thanks


Originally posted by @Diana Jing:

Hi @Roushel Asuncion ,

Nice goal to get into a rental before end of year!  I actually closed 3 homes with rent to retirement & @Zach Lemaster  a few months ago, and have had a very positive experience overall.  I wrote about my experience on a different thread here:  https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review?page=1#p4497440

So far my cash flow is exceeding their initial projections as I really haven't had any vacancy or maintenance.  I'm sure that will come into factor as I own my homes throughout the years.  All homes were rented at time of closing.  I did not choose to see the homes in person as it did not make logistical sense for me at the time, but I'm sure I will at some point down the road.  They did provide me with a lot of information about the general market overview, the neighborhood, the home & repairs that were done.  I also went on google maps to virtually "drive" the neighborhoods, which all looked like nice locations with well kept homes.  I also relied heavily on the appraisal report as a 3rd party verification that all information was accurately presented to me.  The bank required and ordered the appraisal for each home.

Have you seen the first page to this thread? There seem to be a lot of people that have successfully worked with renttoretirement and happy with their rentals. I actually learned about them from a coworker of mine that has purchased with them for the past few years. We started talking real estate, and about all the benefits of owning rentals in different markets that have higher cash flow & returns. He then put me in touch with them. Overall I was very impressed by their communication, professionalism, and willingness to take as much time as I needed to walk me through all the important steps of investing in a market I'm not familiar with or close to. That was crucial for me doing this for the first time. I'm now working to set up my LLC and entity protection with their guidance and legal support.

I'm very excited I was able to get into 3 rentals in 2019, and my goal is to add 5 more to my portfolio in 2020, and hopefully be at 20 doors by 2022!  Feel free to pm me any specific questions you have.  Good Luck!!

Hi Pretty, 

All is good with our rentals.  We've been very happy with the performance of them and are still investing with them on more properties.  We did have one tenant that lost her job and was unable to make rent payments.  Instead of evicting we allowed her to break her lease and got a new tenant in within a couple weeks at a higher rent so it actually worked out quite well.

We are now doing some new builds with them in FL.  Our first one the appraisal came back $40k above what we paid for it so we are very excited about coming into immediate equity!

Originally posted by @Pretty Khare :

 

@Diana Jing I wanted to check how the properties yo bought from Rent to Retire are doing now. Are you getting the CoCROI that the initial deal analysis showed? How much work do you have to put (if any) after buying the property? Any problems or challenges so far? thanks


Originally posted by @Diana Jing:

Hi @Roushel Asuncion ,

Nice goal to get into a rental before end of year!  I actually closed 3 homes with rent to retirement & @Zach Lemaster  a few months ago, and have had a very positive experience overall.  I wrote about my experience on a different thread here:  https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review?page=1#p4497440

So far my cash flow is exceeding their initial projections as I really haven't had any vacancy or maintenance.  I'm sure that will come into factor as I own my homes throughout the years.  All homes were rented at time of closing.  I did not choose to see the homes in person as it did not make logistical sense for me at the time, but I'm sure I will at some point down the road.  They did provide me with a lot of information about the general market overview, the neighborhood, the home & repairs that were done.  I also went on google maps to virtually "drive" the neighborhoods, which all looked like nice locations with well kept homes.  I also relied heavily on the appraisal report as a 3rd party verification that all information was accurately presented to me.  The bank required and ordered the appraisal for each home.

Have you seen the first page to this thread? There seem to be a lot of people that have successfully worked with renttoretirement and happy with their rentals. I actually learned about them from a coworker of mine that has purchased with them for the past few years. We started talking real estate, and about all the benefits of owning rentals in different markets that have higher cash flow & returns. He then put me in touch with them. Overall I was very impressed by their communication, professionalism, and willingness to take as much time as I needed to walk me through all the important steps of investing in a market I'm not familiar with or close to. That was crucial for me doing this for the first time. I'm now working to set up my LLC and entity protection with their guidance and legal support.

I'm very excited I was able to get into 3 rentals in 2019, and my goal is to add 5 more to my portfolio in 2020, and hopefully be at 20 doors by 2022!  Feel free to pm me any specific questions you have.  Good Luck!!

@Brooke Andrea @Riley Schaefer @Eric Nguyen @David Robinson @Diana Jing


Thanks for sharing your experiences with us. RTR looks promising and its great to hear you've all had good experiences so far. In browsing their pro formas on their inventory section, it doesn't look like CapEx reserves are accounted for. I know their approach is to rehab the properties to address the major systems and ensure there is at least 10 years of life in them, but I'm wondering 1.) has anyone needed to take on a large capital expenditure on one of their RTR properties yet (and if so, what year into your hold period). 2.) How have you factored CapEx into your strategy and how has that impacted performance of the asset?

It seems proper capex reserve budgeting for cheaper SFRs will typically make up a larger percentage of rental payments which eats into cash flow, so I'm wondering what the real financial performance of these investments is for the folks who have invested whether you've realized a CapEx event already or are just planning for it.

Thank you!

Disclosure: CEO Rent To Retirement

@Max Sack

I will let the investors speak about their experiences as well, but I'll throw in my two cents.

Have you checked out the FAQ page on our site?  This question is answered in great detail there along with many other questions as well.

You are correct that capex can be a large expense that can eat up cash flow.  Our requirement is that there is significant life left in all major systems so you would not anticipate having a capex item within a reasonable period of time owning a rental.  Of course if you are holding a property for many years you need to factor in capex repairs, but you also need to account for rental increases, appreciation, debt reduction, depreciation, etc.  We've found that most of our clients hold properties between 3-5 years, and then choose to sell them as they've built up enough equity to 1031 into other investments to expand & scale their portfolio.  If you are holding for this amount of time you will likely not have any capex, and we would not expect you to therefore we do not factor that in a typical holding period.  You always need to run your own numbers based on what your goals are, and anticipated holding period.  This is why you simply cannot have standard numbers in terms of what you run for vac, mait, capex, etc.  Each property, market, disposition, etc. could be quite different.  With our TK properties we base #s off of what we typically see with the average client, and past deals.  It is also important to keep in mind that we have new construction where every system is brand new, and in some select markets there are system warranties that could extend from 5 years to 20 years.  So lots to go into when considering this aspect of evaluating rentals, and what the best choice is for you.  Hope this helps some.

@Max Sack

We have had many rentals purchased through them for many years.  No unexpected cap ex expenses, and as zack mentioned we've done a 1031 on a couple properties that appreciated quite well to buy other rentals.  It's always good to have reserves for any rental you have, but I think going this route with a reputable company helps to mitigate the unexpected items.

@Pretty Khare

Yes, feel free to PM me.

I just looked over their listings. Are they serious about 3% vacancies and 3% repairs??? Those are insanely deflated figures. I'm putting aside 8% for vacancies and 10% for repairs and that's not enough to cover repairs/turnivers in a completely gut-renovated house in an area with great employment all year round !...