Feedback on RentToRetirement and Zach Lemaster
Flipper/Rehabber · South Royalton, VT · Member since 2017 · 80 posts · 36 votes
Feedback on RentToRetirement and Zach Lemaster
Most Popular Reply
Bismarck, ND · Member since 2017 · 56 posts · 201 votes
7y@Timothy Swaan My plan isn't overly complicated, but I think where most people fall short is simply not CONSISTENTLY following their plan year after year! Right now I have 8 SFRs that cash flow $250-$350/month net (actually more when I don't have any vacancy or maintenance). I also have 4 SFRs I own outright with no mortgage that cash flow $700-$1,000/month net. Three of these I bought through my SDIRA, and the other one I've used the cash flow from my whole portfolio to aggressively pay down the mortgage on over the past year. This accelerated debt pay down strategy really helps to increase cash flow without having to own a huge portfolio. My plan for this year is to acquire at least two more homes, and to pay one more property off. Each time I add another property to my portfolio & pay another one off, my income increases to be able to use as a downpayment for another home, or to put towards paying another one off. It becomes easier & easier every year as my income increases. Within a few more years I should be at $10K to $12K per month from passive income, which is the goal I've set for myself to quit my job and actually retire! Zach & his team have been an essential part in helping me to develop this strategy, and most effectively execute it to make my passive income goals a reality!! I Never would have thought I would be where I am today a few years ago, but it all starts with that first investment property. Can't thank these guys enough!
82 Replies
- Bismarck, ND · Member since 2017 · 56 posts · 201 votes5y
Happy to help my friend! I'm glad you found the info useful!
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes5y
@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:
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!!
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes5y
@Brooke Andrea @Dimitri Zavos Can i PM you about the new FL properties? thanks
Originally posted by @Dimitri Zavos:@Brooke Andrea were the new builds the ones in Cape Coral by any chance? I'm also from NYC and thinking of doing one of their new builds there in order to start my journey. Thanks for the great info earlier in this thread.
@Riley Schaefer, I appreciate all your input as well!
- Rental Property Investor · Dallas, TX · Member since 2019 · 48 posts · 121 votes5y
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:
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!!
- New to Real Estate · Seattle, WA · Member since 2015 · 2 posts · 3 votes5y
@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!
- 5yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
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.
- New York City, NY · Member since 2017 · 43 posts · 174 votes5y
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.
Yes, feel free to PM me.
- New to Real Estate · Seattle, WA · Member since 2015 · 2 posts · 3 votes5y
@Brooke Andrea @Zach Lemaster Thanks both for your responses!
- New York, NY · Member since 2018 · 100 posts · 20 votes4y
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 !...
- Investor · Sacramento, CA · Member since 2017 · 58 posts · 27 votes4y
Originally posted by @Stan C.:
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 !...
Gotta agree with this, at least 5-6% each.. I prefer to be conservative with my pro-forma. If you allow higher percentages for everything and still get cashflow that you are happy with, you won't be disappointed down the line.
- Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes4y
@Max Sack I too have used Zach and his team at R2R for investing and It has been extremely positive. I am currently in the process of building my a new build in Cape Coral FL with them that had an all in cost of about $265, is a 4/3 model, rents estimated at $2300/mo and post construction appraisals are $377k on average for this model. I plan to cash out refi once this is built to take my money back out! Would highly recommend! Good luck and feel free to reach out
- Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes4y
@Max Sack I'm on deal #7 overall with RTR. My first was in Little Rock, AR back in 2019. I sold the property two years later and used the proceeds from a healthy appreciation to buy lots in a hotter market - Cape Coral. My maintenance costs while holding the Little Rock property were 2.7% and my vacancy was 0% (had a tenant in place before my loan closed). As @Zach Lemaster mentions above, the key is to manage your rental portfolio and exchange those where the major systems are starting to age before you get hit with the bill and then have to hold the property for several more years to recoup the cost. So many investors on Bigger Pockets want to "buy and hold for 30 years." Rental portfolios need to be managed just like stock portfolios. That's one of the many things I learned from Zach and his team and it's helped me tremendously on my real estate wealth-building journey.
- Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes4y
@Trevor Fleck Good advice comparing real estate to stocks as far as managing one's portfolio. I'm considering doing a 1031 Exchange out of a 5-unit apartment building in Van Nuys, CA that I bought back in 2002. It's been a cash cow that's appreciated nearly 500% but I feel like it's reached its maximum investment potential, at least for me. Municipal restrictions and fees, capex investment needs, and sky high water/sewer and trash expenses are killing my cash flow. Los Angeles is a beautiful mess, but I think SW Florida offers better investment opportunities for me at this point: fewer restrictions and more landlord friendly, and newer product with less capex/repairs. Plus I'm more hands on when it makes sense to be. I'd rather go change a lightbulb myself than pay someone else $100 to do it. That's tough to do from 3,000 miles away.
- Member since 2021 · 6 posts · 1 vote4y
I'm only 23 and looking into purchasing my first rental unit by the end of the year. I've noticed in Rent to Retirement's Pro Formas that they have both a 30-year fixed option showing those numbers and an Adjustable Rate Mortgage (ARM) option. I've never heard of an ARM until I saw these pro formas. My question is, on the properties that you have purchased, have you gone with Fixed rate vs. ARM? Has it been a mix of both?
I understand some of the benefits of an ARM especially if it gives you a lower interest rate and you don't plan on holding it for longer than 5 years or however long the initial rate is. I'm genuinely curious, however, to know what your experience has been with these?
I'm jumping in at a time when interest rates are a lot less favorable than they were even 8 months ago. Thanks ahead of time for your help.
@Diana Jing @Riley Schaefer @Brooke Andrea @Eric Nguyen @Zach Lemaster - 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
Welcome! Thank you for contributing on this thread. I can give my opinion from what I see on a regular basis & what we are personally doing. Over the past few years we have been spoiled with historically low interest rates that have become the norm for that period of time. Interest rates are rising, which is expected to happen. It's hard to compare to 6+ months ago to now where interest rates are at, but it doesn't mean that RE investing doesn't offer the same fundamental benefits it did in the past. There are still many excellent deals out there that many people are being successful with. We just have to change our mindset & strategy to some degree as the lending world and market shifts. This will always be the case as REI is an ever evolving industry. Looking at different loan products is one way of being a creative investor that may allow some opportunities to make sense when they don't with a higher interest rate. We've personally used ARMs for many years. When interest rates were very low for a conventional loan compared to ARM rates, there wasn't much of a reason to explore ARMs like there is now. It's important to know what your exit strategy is with the property & how long you plan to hold it. Most investors we see holding properties between a 3 to 6 year period & then doing a 1031 to expand their portfolio. If you have an ARM with a 5 or 7 yr fixed period at a lower rate than a conventional, then it might make sense to use that product to finance a property if you did sell or refinance before the adjustable rate kicks in. It's also important to know all dynamics of how the ARM works with each specific lender as terms can vary. Often ARMs have a threshold for how much the rate can go up or down once the variable period starts. With rents expected to go up in the future, it may not matter so much if the rate goes up say by a 0.5% threshold after 5 years if it means you can cash flow more in the first 5 years. Also, you can always refinance if needed before or during the variable period. Best thing you can do is run the numbers with different scenarios to see what makes the most sense for you with your goals. We are always here to assist in building out a specific strategy & comparing different scenarios, so please don't hesitate to reach out at any point in time with questions. Hope this helps!
- Member since 2022 · 3 posts · 2 votes4y
I would strongly advise to do thorough due diligence. Hire your own inspector for the home inspection, visit the properties before closing and find your own property management. I lost tens of thousands of dollars after realizing the “rehabs” were just a coat of paint and creative photos that did not show the reality of the rehab. Some turnkeys take advantage of new investors and lead you to believe they are building your team. The reality is that the more connected the players are, the more money they make and the less you know. You also need to ask yourself why there are no negative reviews on posts on a turnkey and why no one is talking about long term experience. A turnkey could make you sign a contract when buying a property that states you cannot say anything negative about the company. I guess that would show the company is not good to begin with…
- Investor · Kansas City, MO · Member since 2015 · 48 posts · 165 votes4y
Just to clarify the latest post on this thread. This brings up many good points about hiring inspectors and going through the same due diligence process you would when buying any property. It's essential to have a property inspection, appraisal & ensure obtaining a clear title prior to closing. Make sure to speak with any manager you work with to ensure they are the right fit. To clarify, this person is NOT an RTR client. We want to make that distinction since this post is on a thread mainly about RTR even though they are talking about TK in general. It's also important to look at the accounts posting comments like this. Accounts that have no personal information, opened recently, and only have one or very few comments are most likely fake accounts. We have seen competitors, or people in other businesses that compete with TK, posting things like this from fake accounts to deter people from exploring certain types of investing. I wish BP would have more of a vetting process to verify information. We can see that this account was opened less than a month ago, has no personal information & only has one negative post. No further interaction with anyone on this site. Lastly, I'd like to point out the part about positive comments. People will not go out of their way to post a positive comment if they haven't had a positive experience. This thread is 5 years old with a great deal of positive feedback for years. We highly recommend doing due diligence in purchasing any property, but also using some discretion with reading comments on public forums like this.
- Investor · Member since 2022 · 26 posts · 13 votes4y
Quote from @William Battistelli:
I just had my initial consultation with Zach earlier today. He seemed knowledgeable and helpful during the call. I am looking to move forward and I’ll keep you posted about how it goes.
Hey There...I came across Zach's program and would be interested in hearing an update from your experience with him.
- New York City, NY · Member since 2017 · 43 posts · 174 votes4y
Ryan,
We've only used fixed rate mortgages. Even with rates going up, we are still buying with conventional loans as they are the best terms. I know an ARM may be able to get a lower rate initially, which is something we will probably explore, but to date we have only used fixed rates. If rates go back down in the next year or so, we will likely refinance to the lower rate to cash flow better, and we anticipate rents to go up year after year as well like we have seen in all our rentals so far. That is why we are not concerned about current interest rates as it's only a point in time.
- Member since 2021 · 5 posts · 1 vote3y
Thanks for the info
Quote from @Pat Wagner:
I would strongly advise to do thorough due diligence. Hire your own inspector for the home inspection, visit the properties before closing and find your own property management. I lost tens of thousands of dollars after realizing the “rehabs” were just a coat of paint and creative photos that did not show the reality of the rehab. Some turnkeys take advantage of new investors and lead you to believe they are building your team. The reality is that the more connected the players are, the more money they make and the less you know. You also need to ask yourself why there are no negative reviews on posts on a turnkey and why no one is talking about long term experience. A turnkey could make you sign a contract when buying a property that states you cannot say anything negative about the company. I guess that would show the company is not good to begin with…
- Investor · Kansas City, MO · Member since 2015 · 48 posts · 165 votes3y
As a reminder and to be abundantly clear, Pat Wagner is NOT a RTR client & NOT referring to his experience with RTR. This is good advice to share in general when buying REI anywhere (regardless of TK or otherwise), but we want to ensure readers are clear this has nothing to do with RTR since this thread is specially speaking about RTR which is overall a very positive post. We do not allow our investors to have these types of experiences without intervening to help resolve these types of situations.
- Flipper/Rehabber · Driggs, ID · Member since 2020 · 1 post · 5 votes3y
Hi @Riley Schaefer,
I know this is an old thread, but wanted to reach out and hear about your more recent experience with Rent-to-Retirement. Are you still using them today? How have the properties you bought 4 years ago worked out? I'm thinking about using them for my first out-of-state rental property, but just trying to get over the hurdle of the unknown. Are their projected cash flow and expenses accurate? Any experience you can share is greatly appreciated!
- Rental Property Investor · Member since 2021 · 2 posts · 5 votes3y
Hi! I'm interested in Rent-to-Retirement. I've read glowing reports about them, but don't see two statistics: their fees and ROI. These number will vary based on property, but before I contact them directly, can anyone share their actual numbers? Thanks!
- Bismarck, ND · Member since 2017 · 56 posts · 201 votes3y
@Trevor Amsberry Sorry for the late reply. I'm not on BP consistently these days.
Overall the experience is still very positive, and yes, I am continuing to invest with them. I think they are great team to start with. I have gone on to make some of my own investments as well, but I continue to buy in the locations they have teams in that I do not. All my properties are cash flowing well and I've experienced excellent appreciation over the past few years on the properties I purchased (like many people have). I have found that the new construction seem to perform better over time with less maintenance even though the ROI seems slightly lower upfront. My recommendation on a starting point would be to focus on new construction that is already completed. Hope this helps.
@Cathleen Arhelger I would look at their website to see ROI and other data points, and definitely reach out to their team to ask specific questions. I've continued to find them very helpful with all my investments I'm working on regardless if it's through their network or not, which is great! They don't charge anything to you for this. Best of luck!
- Member since 2023 · 8 posts · 21 votes2y
@Josh Rogers, thanks for sharing your experience over time! I know you posted this 5 years ago, but just read this.
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