"Turn Key Cashflow Rental" websites

Irvine, CA · Member since 2010 · 28 posts · 12 votes

Has anyone used this site?

http://www.investornation.com/

It claims to sell "Turn Key Cashflowing Rentals." The only markets available for cashflow seem to be Memphis and Atlanta on their site. I imagine they are buying Bulk REOs, rehabbing them, and selling them at mark up for profit while supposedly still maintaining cashflow numbers.

However, what I'd like to know is if anyone here has used them and do their properties really stack up? Also, how does the whole process work? Their website is very general and it seems they want you to call, presumably so they can get a sales person on you.

As an additional note, a new user on here posted this website http://masonhill.com/, claiming the same kind of turn key rentals. The programs sound very similar in their operations.

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Todd Brittingham

Real Estate Investor · Walled Lake, MI · Member since 2010 · 121 posts · 66 votes

15y

Victor,

As with anything else, you need to do you due dilligence before investing with any of these companies. If you are going to be an out of state investor that is fine, but if you're willing to invest in a property for thousands of dollars, it's probably worth the time and effort spent over a weekend to visit the area you are going to invest in. This will give you a chance to meet and interview various companies you might work with, and also get a very good perspective of the areas you will be investing in. There are a number of Turnkey sites popping up, and they are a good way to go if you find the right team.

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Phil Petite
Real Estate Investor · New York, NY · Member since 2009 · 36 posts · 0 votes
15y
Victor,

I just checked out the Investor Nation website and only saw one deal - the one for $74,900 with a projected $362 monthly cash flow. That's not a very good cash-on-cash return at all. You're right, it does seem like a very vague/general website. It can't hurt to call them though and ask for the numbers on their other deals.
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David Beard
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
15y
No doubt these are springing up everywhere. There are quality companies with track records, at least some of which have members contributing to BP. They appear to offer houses that are fully rehabbed and even rented, as well as houses that are ready to rehab, in which case they'll present the rehab estimate and an estimate of the rental rate. They may offer to also do the ongoing prop mgmt, or at a minimum will recommend a good company. They invariably tout the "instant equity" at close as well as the ongoing cash flow and strong ROI. They sometimes offer to connect you with a local bank for financing, but I'm not sure how receptive these banks would be to an out-of-area investor.

I've seen these two in Memphis that look very repectable and offer very reasonable "turn key" properties, both of which have BP members running them or working for them:

www.memphisinvestmentproperties.net
www.memphisinvest.com

.. and Detroit Urban Wholesalers seems to have a sound system.

www.wholesalemi.com

Safe to say companies like this exist in every urban market.

I'd think these are a very reasonable way to remotely purchase into an area with a strong rental market, using local expertise, and allowing diversification of your holdings.

I'd likewise be interested in other's thoughts on the pros and cons.
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Todd Brittingham
Real Estate Investor · Walled Lake, MI · Member since 2010 · 121 posts · 66 votes
15y
Victor,

As with anything else, you need to do you due dilligence before investing with any of these companies. If you are going to be an out of state investor that is fine, but if you're willing to invest in a property for thousands of dollars, it's probably worth the time and effort spent over a weekend to visit the area you are going to invest in. This will give you a chance to meet and interview various companies you might work with, and also get a very good perspective of the areas you will be investing in. There are a number of Turnkey sites popping up, and they are a good way to go if you find the right team.
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Taylor Adams
Real Estate Investor · Los Angeles, CA · Member since 2010 · 14 posts · 2 votes
15y
I have heard nothing good about these guys. Do your homework.

Good luck
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y

The PM they recommended turned out to be a real zero:

1. Put a tenant in a nicer property with 4 eviction court appearances in one year. Actually, that was the wife who they snuck in under the radar. She never got put on the lease.

2. They had to eviction court twice in 4 months. Finally had to be evict them.

3. Despite the above, the pm tried to talk the owner into letring them stay!

4. This property is now on the 5th month with no rent coming in. Not good for CF!

5. PM they recommended was fired, then found out from the new pm that:

a) There was a roof leak he didn't tell inform the owner about. That's why tenants weren't paying the rent (so they say)!

b) The tenants backed the car into the garage door causing hundreds to fix. The pm they recommened didn't bother to tell the owner.

5. The owner told the pm he was thinking of dumping this headache they sold him. He passes this on to Investor Nation and they send an email to the owner a couple days later offering to help them sell it! Tried to make it sound like they wanted to help him. So they sell him a property, recommend a ZERO pm, turns out to be a mess and they are ready to dump and they TRY TO MAKE A LITTLE BACK END PROFIT! Precious!

Here me now, and believe me later. Avoid these guys. Join a LOCAL REI club! Get to know OTHER INVESTORS who know the area and aren't just trying to make money off you.

PG
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Jeff TumbarelloPro Member
Real Estate Broker · Fort Myers, FL · Member since 2008 · 1k+ posts · 323 votes
15y
http://www.sltrib.com/sltrib/money/51651081-79/hill-mason-brody-investors.html.csp

Mason Hill got taken down. Most of these companys all end up down the same path :idea:
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Loc R.
Note Investor · Pasadena, CA · Member since 2009 · 849 posts · 544 votes
15y
That's too bad.

I've got to imagine that if you are located/based in the right area, be it Memphis, Indianapolis or (pick your city), there's plenty of money to be made by buying properties at a discount, and selling them after rehabbing them & renting them out.

Theoretically, you'd make your money on the sale, and your cash-flow would come from management fees, and possibly even maintenance fees.

There was a BP member who was a big Indianapolis guy a while back...I wonder what happened to him?
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Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
15y
Hey Jeff -

I was interested in why you say 'most of these companies end up going the way of Mason-Hill' which was clearly a fraudulent company not doing any business.

Chris
Podcast Guest on Show #224
REI Nation4.577 Reviews
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y
Not informing the owner of damage to the property is unsat. According to the owner, he did a google search of the wife (not put on lease), found the shelby county court website. Saw she had 5 eviction judgements against her in a 14 month period. The owner called this pm and he tried to act dumb like he didn't know who was who.

Invest in your own area. If you do invest out of area, deal with someone you really, really trust. Join the local REIA. Get to know people.

I am moving more towards investing in paper not properties. I want to be able to drive by and see that a freaking garage door has been backed into! n The sooner you catch a pm in a lie, or withholding info, the better.

I wonder why he tried to talk the owner into keeping these tenants?

PG
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James Martin
Property Management · Memphis, TN · Member since 2009 · 668 posts · 362 votes
15y
Originally posted by Brian Adamson:
Hey Victor,
As Todd said earlier, you have to do your due dilligence before investing.

I do plan on visiting Memphis later this summer or early fall and meeting with the pm companies that you mentioned earlier. I think its important that you see the area and really get to know the pm's and feel comfortable before investing.

Brian

Memphis has a strong rental market. There are many great Investment companies in memphis. I welcome everyone to come and visit our city and meet with potential companies you think you would like to invest with. I can not and will not try to explain what happen with this deal, because I truly do not know. But listening and knowing all the facts help me as a business owner serve you guys and others smarter and better!
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Jeff TumbarelloPro Member
Real Estate Broker · Fort Myers, FL · Member since 2008 · 1k+ posts · 323 votes
15y
James and Chris, I assume you two work togther?
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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
15y
Jeff,

I do not believe James works with Chris. Funny topic as I used to work for Investor Nation back in 2009. I was their VP of Sales at that time. Needless to say I do not work for them anymore and have moved on to greener pastures. There are only 2 real solid companies in Memphis and thats MemphisInvestmentProperties.Net and MemphisInvest.com We both operate in very similar fashions. Chris Clothier is first class at his company.

Investor Nation is not a true turnkey company as they do sell a fully renovated home but they are not doing the renovations and they refer you to an outsourced management company.
Curt Davis - KAIZEN Realty538 Reviews
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y
Curt,

PLEEEEAAAAASE!

YOU WERE THE ONE WHO RECOMMENDED THIS PM!! Ryan Lubin! You sold this property to the owner (who wants to remain anonymous) in 2009 when at Investor Nation! GEEZ O FREAKING PETE as we say in Michigan!

You guys ought to start a comedy show or something! You could call it "Memphis Deadbeats". You could schedule it right after "Policewomen of Memphis".

This is like dealing with traveling gypsies or something! You all know each other!

Kick over a few rocks and all kinds of things come crawling out! :-)

Time for Ryan H to chime in!!

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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y

James,

What percentage of rental applicants within the city limits of Memphis have clean rental histories?

I've been told by more than one memphis pm that it's hard to find an applicant without "at least one judgement against them" in Memphis. Is this true? I know it's probably true in most large cities (Detroit, Cleveland, Atlanta...etc.).

PG
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James Martin
Property Management · Memphis, TN · Member since 2009 · 668 posts · 362 votes
15y
Most people that rent property have credit issues. If you have been in the business for any lenght of time as a PM, you should have in place an Iron-Clad PM team. There are alot of people in memphis with great credit. I have turned many people into home owners who was just looking to rent, and have never check their credit score. It is my job to make the foot prints for my clients to walk in, helping them to minimize loses, and appreciate their investments. In my network area ($20,000 to $50,000), I expect for some of the people to have judgements. To offset that, we require a hefty downpayment. Should anyone default, we have a great leagal team and pull downtown to expedite any real estate matter. We also keep prescreened tenants to help fill almost all or any vacancies. I chose my area because I know the neighborhood, and I also know how to make money in my market area. I have never done business with the companies Curt mentioned, but I do know that they buy in a more sophisticated part of town. I respect the work they do when I personally know the work invoved in closing 40 transaction a year when they are closing hundreds. So yes in certain areas, it is hard to find applicants without "at least one judgement against them. For me the ones with the judgements have turned out to be the most hard working and loyal tenants!
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Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
15y
Originally posted by Jeff Tumbarello:
James and Chris, I assume you two work togther?

Hey Jeff -

James doesn't work for my company. I assume after looking at his profile he is a wholesaler here in Memphis, but I have never met him.

Chris
Podcast Guest on Show #224
REI Nation4.577 Reviews
Website View Page
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Chris ClothierBusiness Member
Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
15y
This whole thread started about a company named Investor Nation and is exactly why I started the 'Turn-Key' company thread. The owners are very good people doing legitimate business, but is the model really 'turn-key'? They turn over control of the renovation and the property management and therefore have no real idea if the investor is getting what was advertised. Their intentions are good but maybe the business model is not set up properly to REALLY insure success, but it is one that they believe in and I am sure they have clients that would say they love Investor Nation.

I think its been said many times on here, do your due-diligence, ask questions and get to know the exact process of doing business going forward before buying. There is nothing wrong with asking questions and getting to know who you are going to do business with.

Podcast Guest on Show #224
REI Nation4.577 Reviews
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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
15y
Phil,

You dont have to name the investor but let me know what the address was.
Curt Davis - KAIZEN Realty538 Reviews
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y
If I gave the address, the investor wouldn't remain anonymous. What difference does it make? Are you saying you didn't recommend this PM?

Brian,

I have concerns not just about pm companies, but turnkeys and the quality of the tenants in general. I don't care what anyone says, not all renters have bad rental or credit histories. I've rented in numerous places. I've never had to rent to an applicant with who has been to eviction court before, simply because most of the applicants available have at least one such judgement on their records. I wouldn't recommend investing in such a place.

PG
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y
Sorry, that wasn't very clear.

I wouldn't rent to anyone who has ever had an eviction judgement against them, or has been taken to court for not paying their debts. Life is too short! But that is the case for most rental applicants in Memphis. So I have been told by Memphis pms. AFTER THE FACT, of course! Turnkey hawkers would mostly avoid telling you this, or at least down play it (our PMs are different, blah! blah! blah!). Had I know this before, I would have avoided Memphis. Memphis suburbs maybe.

James' statement that most rental applicants have bad credit histories may be true in his neck of the woods, but not where I'm from, or where I've invested before. Virtually ALL areas have renters. Yes there are poor rental applicants EVERYWHERE. And you have to screen them, whereever you are!

Also, since most RE is depressed now, there are plenty of good areas to invest in that are cash flowing, and you can find creditworthy, tenantworthy applicants. You don't have to invest within the city limits of Memphis, Atlanta, Detroit, Cleveland...etc. to cash flow. The SUBURBS are cash flowing! The sun belt is cashflowing!! You don't have to lower your standards for the sake of cash flow.

PG
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James Martin
Property Management · Memphis, TN · Member since 2009 · 668 posts · 362 votes
15y
Phil, I want to clear up what I stated. In my post,I was talking about my market area where I invest & manage in. I said that their are a lot of people in memphis with great credit and for the ones that I rent to with issues, we require a hefty down-payment. My friend, don't think Memphis is this small hick town with poor people pushing baskets. We have great families here with good jobs in every area.I chose my area because I can buy a Brick 3br/2bth 1500sqft home for $25,000. Also, I am in a neighborhood with retired, nosey, stabled families. Bad credit is not the case for most rental applicants in memphis. The part of town will have everthing to do with the class of people who would be renting your property. You may not want to invest in memphis, but I think someone would be a making a mistake.
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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
15y
Phil,

since you wont inform me of the address or the client I am not able to give you my opinion of the property or any situation. Its easy for you to accuse and point fingers and not give any info. Memphis does have lots of tenants with poor credit and other issues. When looking at a potential application your not really looking at credit score but more looking at rental history and income verification, also how many times have they moved in the last 5 years.

It is too bad this anonymous person had a bad experience in the past. The PM company recommended to them at the time was doing a good job. Keep in mind that not all companies have a 100% perfect track record. Since I didnt put them into the home I can not tell you if I though they looked good but then turned out bad.
Curt Davis - KAIZEN Realty538 Reviews
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y

I specifically mentioned tenant rental history in my post. Whether the applicant has been taken to eviction court in the past, paid their rent on time, moved a lot...etc. Three separate memphis pms have told me how hard it is to find applicants with decent rental histories in Memphis. They said basically, it's hard to find an applicant in memphis who hasn't had at least ONE rental judgement against them in the past. Sad, very sad. Makes an investor want to invest somewhere else in TN, like Clarksville, perhaps.

PG

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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y

I didn't ask you for your opinion on this property.

As for the buyer, all I can tell you is he bought the property from Investor Nation in 2009, and that you were the one that worked with him. And that you were the one who recommended Lubin for the management part of your comprehensive turnkey package. You said you were with IN in 2009, didn't you?

And now here you come, taking a stab at this same company. Must be a cutthroat biz, selling turnkey packages in Memphis. Dog-eat-dog, ruff ruff!

PG
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Phillip Gainey
MI · Member since 2011 · 228 posts · 75 votes
15y
Brian,

I sent you a pm. I will send another.

No, I don't do Memphis or any other large city with a deadbeat culture. The rental biz is hard enough as it is.

Yes, I mention Clarksville. Politically conservative, biz friendly, large military population. And yes, they actually have rental applicants with clean rental histories that don't consider going to eviction courst just a "right of passage" and part of the local cultural experience.

Actually, I am not investing in any more rentals. Easier to get cash flow from making private loans, hard money loans, buying notes...etc. No toilets or tenants. Still has risk, but less of a PITA. As always, deal with people who have a track record and skin in the game.

PG
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