Another Spartan Invest Turnkey Case Study

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Another Spartan Invest Turnkey Case Study

Rob Hakes
Murray, UT · Member since 2016 · 162 posts · 166 votes

I recently purchased a property from Spartan Invest and wanted to post the details and make it an ongoing case study solely for the benefit of those looking into the company.  I really appreciated others doing this as I was vetting the company so i wanted to return the favor.  Though I am hesitant, will give some of the nitty gritty actually numbers of loan costs etc, just to show the true cost of what to actually expect

After a while if you don't see updates on the property's performance give me a bump and i will update with some details on actual returns

Property - 3/2 1250 sf in Birmingham.  $97,500

Projected Rent $925

Put under contract in July 2017 - This was an extensive rehab and took a while.  I don't think rehabs are usually this extensive

Rehab included new roof, windows, all new HVAC.  Interior was basically stripped to the studs and all new interior with the granite countertops and tile shower.  It even appeared that they had to run some new electrical and plumbing.  Basically as close to a brand new house without it being brand new. (i will post pictures soon)

We didn't close until Dec 1 2017 at which time there was already tenants in the house with a 2 year lease at $950/mo ($25 more than projected)!!!

The tenanting fee is one months rent, but it didn't sting to bad because the first mortgage payment was not due until Jan 1 2018.

Now the nitty gritty numbers

Down Payment $19,500 Loan amount $78,000

Loan Costs, Origination Fees Etc $2692.00

Govt Fees $204.50

Initial Insurance premium $757

Prepaid Escrow $425 (not a deductible expense, but still out of pocket)

Elective inspections: Home, Termite etc $592.00

TOTAL OUT OF POCKET: $24,170.50

PLUS legal, accounting, and title transfer fees: ++++ ongoing and pending

For the first year or so i plan on making a decent return as vacancy and maintenance will be low

MONTHLY INCOME 

$950

EXPENSES

$578 PITI (taxes are 945/yr, insurance is 757/yr)

$85 Property Management

This will leave $287 for me as cash flow.  An undetermined amount will be set aside for future vacancy and maintenance.

Overall, Spartan has been good to work with and have delivered as advertised.  There were always times it took a few days to return emails, but nothing totally unreasonable.  There was one week that emails had zero response, but found out later that the hurricane in Florida took out their server for a bit.

I got my second property under contract with them this month so hopefully things continue to roll!!

I do realized that i am a bit spoiled on my first property to have things go pretty well with such a good rehab, and having the place already rented out for more than projected.

If you want more specific details feel free to PM me.

PICTURES FORTHCOMING

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y

Rob now that U have some experience here is some general advice that is germane in any real estate market.

1. Always get a sewer scope as part of your home inspection. Sewer problems are almost # 1 for landlords and if the waste line is old it should be replaced by the seller prior to you closing.. My buyers of my new construction homes even get sewer scopes to make sure the line was put in without any belly's. Never buy a house without a sewer scope bottom line.

2. Vacancy be sure to read the fine print of your insurance policy.. many policies have a 60 or 90 day vacancy clause .. IE your home is vacant over 60 days they are not going to insure you for a fire loss or other loss's. As they know the risk inherent to vacant homes.. So you would then buy a vacant home rider to protect yourself. Ask me how I know this.. I have had a few fires and the first thing adjuster did was query the neighbors to see how long the home was vacant.  devious those guys are  :)  but better safe than sorry.. So pull your policy and read it .. no one does LOL  

3. on Tax's in many areas there is owner occ exemptions.. So when you check into the tax's and see they are 800 a year.. then the property loses its owner occ exemption and it jumps up double.. that's what can bit you. So be cognizant of that.. ask that question..  Tax's are pretty important to the cash flow investor.  That's why Vegas even though you don't hit the 1% rule vis a vi rent and purchase price.. Tax's are 1/3rd as high based on value as most other areas of the county.. IE a 300k house will have tax's at 1200 to 1500 a year.. were in Texas that tax could be 6 to 7k a year HUGE cash flow difference. Granted price of entry is higher . but when you really run the numbers the 300k home with 2k rent will cash flow as good if not better than many of the so called cash flow markets. Also really low cap ex as these are 10 to 20 year old homes that are stucco and tile roofs. Etc.. I just mention because of was shopping this week. And was pleasantly surprised at what I saw. and Man those that bought in Vegas in 2010 to 2015 or so.. they just have to be smiling.   Just an aside.. because I know many investors just discount properties out of hand if they don't come close to the 1% rule.

@Caleb Heimsoth  I think that light bulb finally went off with Caleb that's why you see his posts these days to be a little different slant than in years past.

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  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @James Wise:
    Originally posted by @Andrey Y.:
    Originally posted by @Rob Hakes:

    @Mike Malfitani

    As with any turnkey company or anybody selling an investment property for that matter, i would only use the pro-formas as a reference, but should not substitute your own due diligence for each expense item.  When you take into consideration the first months tenanting fee, renewal fees, and the cost to get a house rent ready, then I think that this would put you over the 4% and 4% maintenance and vacancy.  

    I do think that Spartan has a 96% occupancy rate as they claim, but I don't think 4% of the months rent will cover the costs.  I would do these calcs on your own.

    I recall at some point in the past asking about their proforma sheet and they are trying to present an apples to apples comparison with other turnkey companies.  There are major limitations with how accurate they can be because there are so many things out of their control on a single property, such as how a property is financed, rates, tax appraisals, and what happens with tenants on a given property. 

    I know they do post their average turnover costs in their 'getting started packet' but i don't know if its included in the 4%.  Maybe @Clayton Mobley can weigh in if he has a minute.  

    You will also notice that when they talk about returns they will typically talk about 'return on equity' which is not a true return on you cash because your 'equity' only includes your downpayment, not the other 5 grand in closing costs.  This is understandable because they have no idea if or how it will be financed.  The 'return on equity' number will always be high (15% plus), but I calculate my cash on cash return around 8%.  

     I would like to know.. why the 1 month re-tenanting and 1/2 month re-up fee? This seems to me a conflict of interest. ie. They are incentivised to have a tenant stay 1 year (they get a $950 check every year) instead of 2 years (they get a $950 fee every 2 years). So there is no incentive for them to encourage longer occupancy. I would take $950 any day vs. just a $95 10% PM fee. 1 month to readvertise and first month's rent gone, that is 2 months you are out of rent. That is $1900 of rent lost.

     This is common practice in the Property Management industry. Nobody works for free. You gotta pay to play my man. Property Management is actually a pretty thin margin business. If Spartan wasn't charging those fees they'd be out of business in no time.

     I don't disagree with you.  But you didn't address the incentives and specific math that I've layed out. And by the way, the PM on my Little Rock property doesn't charge 1 month's rent and 1/2 month's reop fee, and they provide a good service and are a pleasure to work with. After seeing it is possible to not have to pay a 1 month's lease fee, why should someone settle for doing so? These are genuine questions, I am not bashing anyone's particular business model.

    1Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Andrey Y.

    Definitely valid questions.  With real estate investing it all boils down to the math so if you're not satisfied with the projected returns then it would definitely be too much of a hassle with all of the headache of purchasing a home.  I asked myself the exact question 6 months before i took the plunge into turnkey.  I like that @Jay Hinrichs pointed out the steady nature of note investing. My person REI journey started with the intent of doing note investing exclusively because of the hassle free nature.

    I did find a note that i was able to purchase a fraction of ($17,000) that pays 10% for 12 years. Truly mailbox money, and no downpayment. In fact i don't even have to pay the note servicing fee. The only expense for this investment was the $15 to wire the money to the broker. After this deal, that is still faithfully paying, i remember looking at some turnkey deals and really turning my nose up at them thinking the exact same thing "why would anybody to this for $150 a month" here is why i have changed my strategy to a turnkey that may pay 10% ROI versus a virtually no hassle note investment

    Downside of notes:

    -Vacancy on Money.  With an amortized note you are getting back some of the principle every month.  This means less and less of your money is deployed capital until after x years it is all gone.  This really hurts if you don't have enough notes in the pot to grow quick enough to re-deploy capital.  With a rental your capital is always deployed, and it won't disappear in x years.

    -Taxes.  Again a simple math equation.  interest income is taxed as regular income while a rental property is wildly taxed advantaged.  

    -Availability.  I think a good note needs to be on a property that is good enough collateral that you can comfortably foreclose upon if needs be.  This is tough if i only want to put about 20k into each deal as i don't want a note collateral to be a 20k property.  This is solved with buying a fraction of a note, but i have learned that they are not as easy to come by.  @Jay Hinrichs if you have any suggestions on where to get fractional notes for smaller investors my ears are open.

    -No Upside potential.  Notes are not going to have the potential to appreciate, or get equity pay down, which are icing on my projected returns.  Notes have limited ability to produce anything other than the interest rate.

    So where i don't mean this to be a post on note investing, maybe this helps answer the question of why go through all the hassle of a turnkey property for relatively low cash flow.  I also look at the ROTI, or return on time invested.  With a good turnkey company I am not having to really put too much effort into the investment.  So for something that all i have to do is check my bank account once a month, ill take the $150 all day long.

    I think there are some better returns out there if you are willing to not go turnkey, and sacrifice the time that may need to put in.    

    1Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Andrey Y.

    Also to address your question about the high tenanting fees.  If you have found a PM that does not charge them that is awesome.  I would make sure their business model provides them sustainability so they are around long term.  That it not common, so if they are a good stable company i would hold tight to them.  

    I don't think the primary incentive of the turnkey companies is to churn through tenants to keep getting fees.  From a primarily monetary point of view they will be better served to keep good investors coming back to buy more properties as they do make good money on the 'flips'.  They do have to provide good returns to keep investors lining up or the real money making arm of the company (rehab and sell) would not last long.

    Just my two cents.

    0Reply
  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Rob Hakes:

    @Andrey Y.

    Also to address your question about the high tenanting fees.  If you have found a PM that does not charge them that is awesome.  I would make sure their business model provides them sustainability so they are around long term.  That it not common, so if they are a good stable company i would hold tight to them.  

    I don't think the primary incentive of the turnkey companies is to churn through tenants to keep getting fees.  From a primarily monetary point of view they will be better served to keep good investors coming back to buy more properties as they do make good money on the 'flips'.  They do have to provide good returns to keep investors lining up or the real money making arm of the company (rehab and sell) would not last long.

    Just my two cents.

     Sounds good. I also love the tax advantages of rental real estate. I may pick up a couple of Turnkeys this year. I think apartment syndications have been better investments for me so far, and they require no effort or stress at all. Turnkey investing still takes up a bunch of time (the escrow process, finding inspectors and appraisers, negotiating back and forth with the seller, also checking repairs and asking why you were charged so and so), so I don't think its as hands-off as people think. Being a passive investor in a large apartment IS hands-off. And it seems like its been like this for me:

    Properties that I find and hold myself >> passive syndications > turnkey properties in terms of returns.

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Andrey Y.:
    Originally posted by @James Wise:
    Originally posted by @Andrey Y.:
    Originally posted by @Rob Hakes:

    @Mike Malfitani

    As with any turnkey company or anybody selling an investment property for that matter, i would only use the pro-formas as a reference, but should not substitute your own due diligence for each expense item.  When you take into consideration the first months tenanting fee, renewal fees, and the cost to get a house rent ready, then I think that this would put you over the 4% and 4% maintenance and vacancy.  

    I do think that Spartan has a 96% occupancy rate as they claim, but I don't think 4% of the months rent will cover the costs.  I would do these calcs on your own.

    I recall at some point in the past asking about their proforma sheet and they are trying to present an apples to apples comparison with other turnkey companies.  There are major limitations with how accurate they can be because there are so many things out of their control on a single property, such as how a property is financed, rates, tax appraisals, and what happens with tenants on a given property. 

    I know they do post their average turnover costs in their 'getting started packet' but i don't know if its included in the 4%.  Maybe @Clayton Mobley can weigh in if he has a minute.  

    You will also notice that when they talk about returns they will typically talk about 'return on equity' which is not a true return on you cash because your 'equity' only includes your downpayment, not the other 5 grand in closing costs.  This is understandable because they have no idea if or how it will be financed.  The 'return on equity' number will always be high (15% plus), but I calculate my cash on cash return around 8%.  

     I would like to know.. why the 1 month re-tenanting and 1/2 month re-up fee? This seems to me a conflict of interest. ie. They are incentivised to have a tenant stay 1 year (they get a $950 check every year) instead of 2 years (they get a $950 fee every 2 years). So there is no incentive for them to encourage longer occupancy. I would take $950 any day vs. just a $95 10% PM fee. 1 month to readvertise and first month's rent gone, that is 2 months you are out of rent. That is $1900 of rent lost.

     This is common practice in the Property Management industry. Nobody works for free. You gotta pay to play my man. Property Management is actually a pretty thin margin business. If Spartan wasn't charging those fees they'd be out of business in no time.

     I don't disagree with you.  But you didn't address the incentives and specific math that I've layed out. And by the way, the PM on my Little Rock property doesn't charge 1 month's rent and 1/2 month's reop fee, and they provide a good service and are a pleasure to work with. After seeing it is possible to not have to pay a 1 month's lease fee, why should someone settle for doing so? These are genuine questions, I am not bashing anyone's particular business model.

     Those charges are more or less industry norms. I'd imagine your PM in Little Rock is a newer or smaller operation. If they hope or desire to grow their business i'd imagine you will see their fee structure slowly change over time. Price undercutting is not an uncommon strategy for a business to come in & snag market share.

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Andrey Y.

    I have thought about putting some $ into a syndication.  I have looked at Holdfolio because they don't require the investors to be accredited.  Seems like okay returns.  I think it was around 10-12% but i don't remember how that income is taxed.  

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Rob Hakes:

    @Andrey Y.

    Definitely valid questions.  With real estate investing it all boils down to the math so if you're not satisfied with the projected returns then it would definitely be too much of a hassle with all of the headache of purchasing a home.  I asked myself the exact question 6 months before i took the plunge into turnkey.  I like that @Jay Hinrichs pointed out the steady nature of note investing. My person REI journey started with the intent of doing note investing exclusively because of the hassle free nature.

    I did find a note that i was able to purchase a fraction of ($17,000) that pays 10% for 12 years. Truly mailbox money, and no downpayment. In fact i don't even have to pay the note servicing fee. The only expense for this investment was the $15 to wire the money to the broker. After this deal, that is still faithfully paying, i remember looking at some turnkey deals and really turning my nose up at them thinking the exact same thing "why would anybody to this for $150 a month" here is why i have changed my strategy to a turnkey that may pay 10% ROI versus a virtually no hassle note investment

    Downside of notes:

    -Vacancy on Money.  With an amortized note you are getting back some of the principle every month.  This means less and less of your money is deployed capital until after x years it is all gone.  This really hurts if you don't have enough notes in the pot to grow quick enough to re-deploy capital.  With a rental your capital is always deployed, and it won't disappear in x years.

    -Taxes.  Again a simple math equation.  interest income is taxed as regular income while a rental property is wildly taxed advantaged.  

    -Availability.  I think a good note needs to be on a property that is good enough collateral that you can comfortably foreclose upon if needs be.  This is tough if i only want to put about 20k into each deal as i don't want a note collateral to be a 20k property.  This is solved with buying a fraction of a note, but i have learned that they are not as easy to come by.  @Jay Hinrichs if you have any suggestions on where to get fractional notes for smaller investors my ears are open.

    -No Upside potential.  Notes are not going to have the potential to appreciate, or get equity pay down, which are icing on my projected returns.  Notes have limited ability to produce anything other than the interest rate.

    So where i don't mean this to be a post on note investing, maybe this helps answer the question of why go through all the hassle of a turnkey property for relatively low cash flow.  I also look at the ROTI, or return on time invested.  With a good turnkey company I am not having to really put too much effort into the investment.  So for something that all i have to do is check my bank account once a month, ill take the $150 all day long.

    I think there are some better returns out there if you are willing to not go turnkey, and sacrifice the time that may need to put in.    

     we solved this with Interest only notes. and deal flow in our company is consistent.. no hunting notes are provided upon demand or your ability to fund them.. just to answer your question. there is a nice balance there..

    Note investing I see as very appropriate or more so for SIDRA or solo K I would say 80% or more of the 1600 notes plus we have done over the last 5 years are all in SIDRA or solo K  as depreciable real estate is not needed in a SIDRA.

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  • Clayton MobleyPro Member
    Birmingham, AL · Member since 2014 · 875 posts · 947 votes
    8y

    @Andrey Y. I know we've moved on from the topic a bit now, so sorry for the delay in my response. I think @Jay Hinrichs and @James Wise covered the most salient points about re-tenanting fees being the industry norm, and PM work not being the money maker people seem to think lol. I will just a note a couple other items and be on my way:

    1. Our minimum lease is 2 years, and our average length of stay is 38 months, which means some people stay much longer than the minimum. 
    2. While I understand that logic behind "fees incentivizes the provider to promote high turnover" it's actually the opposite. Turnkey is a competitive game, and having performance metrics that highlight the consistency of our returns is crucial. While technically it is true that if we changed tenants every six months we would make more in fees, we would also verrry quickly close our doors. Those one-month leasing fees would not sustain us as every single intelligent investor ran the other way because of our turnover rate. 
    3. Our turnover rate also impacts our other crucial metrics, like maintenance (because our rate includes move-out costs) and occupancy. So if we didn't work hard to place tenants that stay longer and pay on time, all our numbers would suffer.  Our data-backed metrics are one of our biggest selling points, so we're not going to risk those metrics for a few extra hundred dollars a door. High turnover is the sign of a struggling PM, so we want to keep our length of stay as high as possible.
    4. The fees we do charge, as James pointed out, are not where the money is made in turnkey by any means. Truly, the work our team puts in to either renew a lease (calls, emails, letters starting six month's out to remind the tenant) or get a new tenant (marketing, vetting, showings) is barely covered by those fees. Our business model, like pretty much all successful, reliable turnkey providers out there, does not really make money on the PM side. It's the money we make by buying cheap through our extensive networks; rehabbing cheap(er than what the same work would cost an individual) due to economies of scale, streamlined processes, and in-house teams; and then selling at market value - that's what sustains us. Just like your DIY buy and holds, most money is made in the gap between purchase and sale price. Any turnkey company that doesn't make it's money there either has to overcharge for their properties or they're nickel and diming investors on the back-end - either way they won't be around for long.

    Ok, carry on!

    4Reply
  • Christopher Perez
    Investor · Arnold, MD · Member since 2016 · 14 posts · 19 votes
    8y

    @Rob Hakes I'm currently investing with Holdfolio and their distributions are taxed as partnership income on a schedule K-1. If you're already filing Schedule E it's not too much additional work to figure out and add the partnership income. Each of their offerings is slightly different but a 10% CoC return has been my experience with the one I'm in. @Sterling White is pretty active on BP and could answer other questions you have.

    2Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    If they’re charging 1/2 month rent to resign a tenant, that seems extremely high. Every quantity PM I use in two different markets charges the one month rent fee, but for a releasing fee it’s more like 100-150. There’s almost no work involved in resigning a lease. The tenant is staying, you may up rent slightly but that’s about it. I am okay with paying the lease up fee for a single family or small multifamily, but if I’m doing larger apartments you can bet I would find someone who does it for a fixed percentage or fixed price per door.
    2Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Caleb Heimsoth

    I am sure lease term has something to do with it as well.  If the leases were a one year lease, then half of a months rent would be too steep.  Its not quite as expensive with the two year lease.  If you can find a PM that is doing long term leases, keeping tenants for long terms, and charging small resigning fees, then that is a great deal.

      I don't think they establish the resigning fee based on the work involved, its just another revenue stream to keep their lights on.  Having a PM that can keep their lights on (or more) long term is vital for a turnkey investor.  

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    Just a quick update on this rental property.  I think this month was the first 'hiccup' so to speak. Tenants have faithfully paid the rent on time until this month.  The rent did not get paid till the end of the month instead of the beginning.  I actually get a little more return with the late fee ($45 additional), but now just have to hope that they stay caught up.  

    I didn't have to do much extra other than message Spartan to make sure they were on it.  

    All is well

    Hope next month gets things back to normal.

    0Reply
  • Jon Zhou
    Sacramento, CA · Member since 2017 · 20 posts · 28 votes
    8y

    thanks for the update, so did the tenant pay the following months rent on time since the payment didn’t happen until the end of the month for the previous month? I had a tenant that was evicted for delaying rent regularly to the point it was always a month behind

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Jon Zhou I won’t know for a few days. Payments usually post on the dashboard  within the first 5-10 days of the month, So we will see. I imagine it will be tough for a tenant to turn around with full rent just  a few days after paying.  Here is to hoping 

    0Reply
  • Noel R.
    Rental Property Investor · Petaluma, CA · Member since 2015 · 151 posts · 143 votes
    8y

    @Rob Hakes Any updates?

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Noel R. Yes it has been a little rocky.  Surprisingly both of the houses I have with Spartan have all of the sudden been slow to pay. Starting in may (as stated in earlier post) the tenant was late to pay.  Coincidentally, the other house I have has been late to pay as well.

    The one tenant paid in full (including late fees) by the end of the month in May, which has pushed this month into the same pattern.  Just crossing my fingers that i get full payment by the end of June, but not very hopeful that they would turn around the next week to get back on track.

    The second tenant has paid late and short paid.  This is a new tenant so they don't have much payment history with us yet.   Spartan set them up on a payment plant to get caught up, but to no avail so Spartan sent an eviction notice. They made a payment in June to catch them up for May which would delay the eviction I assume.

    Spartan has been communicative throughout the process and have kept me updated.

    So really, I am okay waiting for a late payment if it means i get the late fee, however I don't like the feeling of always being on the edge of a vacancy and turnover.

    Hoping to get things back on track.

    0Reply
  • Lucas Atencio
    Anchorage, AK · Member since 2016 · 16 posts · 6 votes
    8y

    @ Rob Hakes, we are in similar situation....

    0Reply
  • Noel R.
    Rental Property Investor · Petaluma, CA · Member since 2015 · 151 posts · 143 votes
    8y

    That doesn't sound very promising. Best of luck!

    0Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    8y

    Rob/Lucas,

    Just wondering how your properties are doing now. Have your tenants caught up and back on track?

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Jaye Seay

    Things are not looking any better.  Both tenants are over a month behind.  Was hoping to get rent and late fees by end of July, but nothing.  So on both houses we are looking at eviction.  If we have to go through with it and payments are not caught up, then this years returns will look pretty terrible with two evictions, two vacancies, and two turnovers.  Total bummer.

    0Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    8y

    @Rob Hakes Sorry to hear that. I hope things get better soon. Thanks for the reply.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Rob Hakes  boy this is unusual for Spartan B class props to have two have issues at the same time.  my experience is it does not get better and you have to bite the bullet..  I am sure Spartan is advising..

    if its around tax return time then sometimes they can make it up. other wise when folks and this goes for any rental anywhere they simply don't have savings accounts.. and once they are behind no catching up..   maybe happens.. 

    Its like catching a falling knife.. so you may want to be proactive in getting new tenants in there.. and if they are just 3 or 4 payments then defaulted. I am sure Spartan is like others they will replace tenant without charging you a lease up fee.

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  • Johnson Lo
    Los Angeles, CA · Member since 2017 · 22 posts · 7 votes
    8y
    Sorry to hear about that Rob. Hopefully Spartan can find more reliable tenants.
    0Reply
  • Jared Friedman
    Investor · Studio City, CA · Member since 2016 · 38 posts · 54 votes
    8y

    Any luck on getting paid with your late tenants? I have several properties with Spartan and I am also in a similar situation with a new tenant who stopped paying  and the eviction process has already begun. My prior tenant for the same property broke their lease after 10 months of steady pay and left several thousand in damages. 

    0Reply
  • Rob Hakes
    OP
    Murray, UT · Member since 2016 · 162 posts · 166 votes
    8y

    @Jared Friedman we are still in the eviction process. No payment since June on this one. The tenant is supposedly still in the house so I can only hope that they don’t trash the place. Discouraging. 

    0Reply
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