Rent to Retirement?
Los Angeles, CA · Member since 2020 · 2 posts · 10 votes
Rent to Retirement?
Most Popular Reply
Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votesGreat, thanks for sharing. You are 100% correct that the various loan options you use will affect the cash to close needed, but closing costs should not be factored into long term cash flow analysis. Just the first year acquisition analysis. I'm not sure about what is being included in your insurance quote. We run the pro forma at $850, but most quotes we see are $600 to $700. I can send you those insurance providers that quote those amounts if you reach out directly. I think $1,800 if far too high. My personal builds in the area have a $640 annual premium. This is definitely affecting your analysis. I can confirm we can get mngt to do better than 8%. That is the benefit to working with our network where we have negotiation power based on volume. The septic treatment will also be less expensive than quoted. I understand the want to be conservative in running analysis, but it's important to consistently be refining the analysis investigating all areas to lower expenses like with insurance. One other point to look in the first couple of years is property taxes. We show tax amounts above $3k which would reflect a full taxable value. It will likely take 2-3 years to be fully assessed to reflect that tax amount. Your first year the taxes likely will be less than $1k allowing quite a bit more cash flow than projected. The taxes will go up over time, but so will rents so that must be factored in to a proper analysis. Just some things to consider as you run some various analysis on this. Either way your slice it the equity is there to make this a great investment with plenty of options. In my experience it is very difficult to find new construction in a growing market, good neighborhood class that still cash flows & has significant, immediate equity. Side note, we are about to release some TX builds are in high demand. They are completed now, or will be soon. Not as much equity as these, but still cash flow well & obviously TX is one of the hottest places to invest currently. Stay tuned for those. Great discussion here that many people will benefit from reading. Feel free to reach out to me directly if you want to set up a time to go through this in greater detail.
104 Replies
- Member since 2021 · 12 posts · 4 votes4y
Hi @Zach Lemaster .. I am interested in the new builds and I have a call scheduled with Eric soon. One of my top concerns right now is that with so many builds happening, how do you envision placing tenants in all of them. With so many homes to choose from would this not create an excess supply of homes in the area where you are building all these new homes? How is the demand for these homes coming along.
Thank you!
- 4yStetson MillerBusiness MemberReal Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
Originally posted by @Bhavya Shah:
Hi @Zach Lemaster .. I am interested in the new builds and I have a call scheduled with Eric soon. One of my top concerns right now is that with so many builds happening, how do you envision placing tenants in all of them. With so many homes to choose from would this not create an excess supply of homes in the area where you are building all these new homes? How is the demand for these homes coming along.
Thank you!
This is a question I get a lot, Cape Coral was actually in the top 10 largest cities by population in Florida with roughly 194,000 people in 2021. Judging by that alone, and then taking into account the massive demand we have across all markets and property types in this area right now, as well as the growth projections for this area, it's easy to see how demand is currently far outweighing supply, and it's likely to remain this way for years to come
Stetson Miller Realtor545 Reviews - 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
Thanks for the question. I understand your concern when you are seeing many people investing in the outstanding opportunity in SWFL. The simple fact is that all the builders combined cannot keep up with the demand for housing (both rental & retail sales). There are a tremendous amount of people moving to the area, and generally the state as a whole. Simply supply and demand shows that there is an increasingly higher demand year after year for housing beyond what supply can keep up with. Once you gain a better sense of the growth happening in this market it will be clear to see that this is the type of market you want to invest in to be in the path of progress. We are seeing the least amount of housing inventory on the market than we have ever seen in this area, and the houses that are on the market (for rent & sale) are on the market for the shortest amount of time that we've seen in recorded history. There are over 1000 people moving to FL a day currently, and this isn't slowing down. We are only making a small dent in the overall housing supply to try to keep up with demand. We often see a waitlist for rentals, and tenants signing leases before the home is even at CO. Even over the past year we have seen rents increase by an astonishing 15% - 24%, and values consistently increasing by over 20% in many of the areas we focus on. This is an exceptional place to live, visit, and most importantly invest! @Stetson Miller shared some great stats supporting this information. Here is another good article to read: https://www.dailymail.co.uk/ne...
Hopefully this helps to answer your question. Feel free to reach out with any other questions.
- Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes4y
New month update for those still interested: I've gotten the go ahead from the city/builder to begin lot prep and fill for construction to begin. I am still pending one final review on building codes, but the review is active on the city's permitting website and I'm hoping to see it approved in the next 1-2 weeks. While the process has taken time, I went into this with the idea it would take at least a year. Right now, I'm on that track for the most part and only have a few more months to go. Will post another update when permit is approved and building begins! Happy investing!
- Member since 2020 · 1 post · 3 votes4y
Quote from @Anthony Ng:
In the process of closing on 2 right next to each other!
Anthony,
I’m looking at investing in RTR properties. And was looking for someone with multiple properties with them. How are these going?
- Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes4y
@David Luna I don’t have multiple with them yet, just the one, and overall have been very happy. I plan to do more, just need more capital! I have some other projects going on. @Trevor Fleck would be a great resource for this question as I think he has 7 with them!
- Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes4y
@David Luna I've got 7 going with R2R in Cape Coral and have done a total of 8 deals with them overall. I'd be happy to chat about how these are going. Feel free to reach out to me.
- Investor · San Francisco Bay Area, CA · Member since 2021 · 6 posts · 13 votes4y
I can provide feedback on a property I purchased from Rent to Retirement in Alabama in 2021.
1) Rent to Retirement has established a network of vetted local partners on which they rely to complete the rehab and perform property management. My understanding is that Rent to Retirement does not have in-house property management and has in-house staff performing the actual rehabs only in certain markets. Therefore, the quality of the product is highly dependent on Rent to Retirement's selected partners in each market. In my transaction, the parties included Rent to Retirement (R2R, the turnkey company), Multi Family Advisors (MFA, the local rehab partner), and Zeker (the property manager, under the same company as MFA). I believe all of the pro-forma numbers provided by R2R are mostly provided by their local partners. I think any company selling real estate has optimistic numbers so it's important for any investor to run your own numbers and not just trust that the seller knows better just because they may be more experienced in a particular market. This includes all turnkey providers, syndicators, brokers, etc.
2) The purchase process with Rent to Retirement was very smooth and was not stressful, using one of their financing partners (Security National Mortgage). Properties are listed on their site and are sold first come first serve if pre-approved with their partners or have proof of funds for cash, based on who emails them first, which seems like a fair process to me. R2R provided feedback on guidance on which areas or properties I should consider as I was selecting between their inventory. The Alabama property I pursued appraised for $6,000 below purchase price and R2R worked with their local partner (MFA) on options to for me to either seek another appraisal, walk from the transaction, or lower the price by $3,000 (half the difference). I agreed to purchase for a $3,000 lower purchase price. MFA set up the home inspection, pest inspection, and septic inspections/cleaning before closing for me. The inspector/appraisers found some issues that MFA were required to fix before closing, which they did. I closed in October 2021.
3) I used R2R's recommended Property Manager for my property (Zeker) without properly evaluating any other options, as I inherently trusted R2R's recommendation. This was a bad idea on my part and I recommend all investors interview at least 3 property managers before deciding regardless of how you acquire the property (MLS, turnkey, off-market, etc).
4) The staff at Zeker seemed nice and did provide a video tour for me before the property closed. I eventually found their communication was slow, the listings often had mistakes or were slow to list at all, and they immediately changed their recommended rent to $100 less than what was marketed by R2R, MFA, and Zeker before the purchase. The lower rent does align with Rentometer, Bigger Pockets Rent Estimator, and other site's estimates for this property. Zeker did work with me on promotions I suggested. However, after 4 nearly months, there were no applications for a tenant and one of the potential tenants that viewed the property wrote notes about the poor condition the property was in.
5) I switched property managers to 1st Choice at the beginning of February 2022, who seem to be much better communicators thus far. They identified $3,000 in repairs that needed to be made on the property. I was disappointed seeing the condition of the property in some of the pictures that were sent to me. Upon hearing of this, Zach at R2R immediately covered the $3,000 for repairs and sent me the money right away so it didn't come out of my pocket, which I greatly appreciated and shows that R2R really cares about their investors’ experiences. Once learning of the issue, MFA offered to perform the repairs themselves for free as part of their warranty but I decided to move forward with 1st Choice performing the repairs as I already paid them and they already began the work. MFA provided me feedback on some of the site work and is also working with Zeker to return my deposit and set up costs with Zeker.
6) R2R has discussed with me potentially covering the following costs due to the continued vacancy: mortgage, insurance, property taxes, and utility bills. If they do so, this would mostly make me whole financially and would further show that R2R really cares about its investors, even if I didn’t have a good experience with their property so far, which I believe is mostly due to the Property Manager, whom R2R is no longer using. I will provide updates whether these eventually get covered.
7) My new property manager, 1st Choice, has it in their agreement that they will cover my mortgage for each month the property is not rented out. I am in process of seeing whether they will be able to actually provide a good quality tenant.
Overall, I’d say it’s at least worth giving Rent to Retirement a call if their markets and properties could be of interest of you, so you can see if they’re the right match. However, keep in mind to always run your own numbers and trust your own research. Using turnkey providers is not a replacement of you performing the needed diligence on a market and each property. Turnkey Providers are essentially providing you an easier purchase experience in a competitive market and allow you to not have to rehab yourself. Try to find feedback not just on R2R but also the local rehab partner for a particular property and multiple property manager options.
Please feel free to reach out to me with any questions.
- Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes4y
They are definitely a good company and you will find multiple threads on these forums where people have shared experiences. Additionally, you might want to think about areas to invest in before selecting a turnkey company. But its a strategy I have used and out of state turnkey investing is definitely something to explore.
- Member since 2022 · 48 posts · 119 votes4y
Quote from @Eduardo Barcena jr:
Does anyone have any experience working with Rent to Retirement? I have been looking into it because they’re a frequent sponsor on the podcasts and wanted to get some feedback. Thanks!
Hi Eduardo -
I've had a very positive working with Rent-to-Retirement and the owner Zach Lemaster. I pursued turnkey for the same reason most do - convenience, time and availability. I purchased 3 properties from R2R back in the fall of 2020 - all were completely renovated and tenants either in place or accepted through the various property management companies that R2R had vetted and put into place.
Two of the properties have gone better than expected and have had next to no issues and barely receive communication from the PM company because there is simply no need. The third property I've had some issues with specifically as it relates to the tenants paying monthly mortgage and how the PM has handled some situations. Upon ongoing issues, I reached out directly to Zach who intervened almost immediately. He was able to secure payment for some issues related to the house and helped get tenants to pay for rent. Unfortunately, the PM continued to have issues so in discussion with Zach, we secured a new PM company which has been significantly better. I don't believe R2R utilizes the original PM company due to some other issues.
Given those experiences, I decided to continue to use them as my preferred turnkey company. I've secured an additional 3 properties in the Cape Coral area - all of which are new builds. One is nearly complete, the other 2 are in their initial phases of construction.
I would definitely reach out to Zach and his team and at least have an introductory call to see if they meet what you are looking for. I've been impressed with my experience.
Happy Investing!
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes4y
Quote from @Zach Lemaster:
Thanks for the question. I understand your concern when you are seeing many people investing in the outstanding opportunity in SWFL. The simple fact is that all the builders combined cannot keep up with the demand for housing (both rental & retail sales). There are a tremendous amount of people moving to the area, and generally the state as a whole. Simply supply and demand shows that there is an increasingly higher demand year after year for housing beyond what supply can keep up with. Once you gain a better sense of the growth happening in this market it will be clear to see that this is the type of market you want to invest in to be in the path of progress. We are seeing the least amount of housing inventory on the market than we have ever seen in this area, and the houses that are on the market (for rent & sale) are on the market for the shortest amount of time that we've seen in recorded history. There are over 1000 people moving to FL a day currently, and this isn't slowing down. We are only making a small dent in the overall housing supply to try to keep up with demand. We often see a waitlist for rentals, and tenants signing leases before the home is even at CO. Even over the past year we have seen rents increase by an astonishing 15% - 24%, and values consistently increasing by over 20% in many of the areas we focus on. This is an exceptional place to live, visit, and most importantly invest! @Stetson Miller shared some great stats supporting this information. Here is another good article to read: https://www.dailymail.co.uk/ne...
Hopefully this helps to answer your question. Feel free to reach out with any other questions.
@Zach Lemaster with the interest rates rising, housing demand is expected to cool down and the investors will have to shell out more money for mortgage, specially for these new constructions which are 8-10 months away from being built and rented out. Do you still see the numbers working on these investments if someone starts the process now?
- 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
Great question! Thanks for asking. This is something many people are wondering about considering the dynamic interest rate environment we are in. We are seeing rates on the rise, but I'm confident they will level off, or possibly come down some in the future. Regardless of what interest rates do, we are still seeing consistent increases in rental rates and market values that far exceed the minimal impact we will see on the mortgage payments from a higher interest rate. In 2021 we saw a 22% increase in rents & 29% increase in market value for these types of assets. When we are looking at cash flow & ROI numbers we are using today's values. When the homes are completed in the future we anticipate the rents to be much higher than today allowing for more cash flow & ideally more equity. That is exactly what we have seen over the past few years and the population growth is not slowing down. So this is a long answer to say, yes, the numbers will still work quite well regardless of where the interest rates are at that point in time. Ideally the numbers will be even better than we are seeing today. The investors that are just nearing completion now have more equity & higher rents than they initially anticipated. @Trevor Fleck would be a good person to ask about initial projections vs actuals on homes that are being completed. Please also keep in mind that you do have the option to sell the property if you decide the cash flow doesn't make sense. You likely will have a large amount of equity by the time it's completed. Additionally, there are loan products you can explore to lock your rate now, or rate lock programs for a year that some lenders offer. Hopefully this answered your question & still gives you confidence to explore taking action now as we will continue to see land & build prices increase over time.
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes4y
Quote from @Zach Lemaster:
Great question! Thanks for asking. This is something many people are wondering about considering the dynamic interest rate environment we are in. We are seeing rates on the rise, but I'm confident they will level off, or possibly come down some in the future. Regardless of what interest rates do, we are still seeing consistent increases in rental rates and market values that far exceed the minimal impact we will see on the mortgage payments from a higher interest rate. In 2021 we saw a 22% increase in rents & 29% increase in market value for these types of assets. When we are looking at cash flow & ROI numbers we are using today's values. When the homes are completed in the future we anticipate the rents to be much higher than today allowing for more cash flow & ideally more equity. That is exactly what we have seen over the past few years and the population growth is not slowing down. So this is a long answer to say, yes, the numbers will still work quite well regardless of where the interest rates are at that point in time. Ideally the numbers will be even better than we are seeing today. The investors that are just nearing completion now have more equity & higher rents than they initially anticipated. @Trevor Fleck would be a good person to ask about initial projections vs actuals on homes that are being completed. Please also keep in mind that you do have the option to sell the property if you decide the cash flow doesn't make sense. You likely will have a large amount of equity by the time it's completed. Additionally, there are loan products you can explore to lock your rate now, or rate lock programs for a year that some lenders offer. Hopefully this answered your question & still gives you confidence to explore taking action now as we will continue to see land & build prices increase over time.
Thanks @Zach Lemaster these look like good flipping options if the property prices hold up for another year. However if you underwrite with a 6.5%+ rate, the cash flow barely breaks-even, even with a 10% rent increase over the current market rent ($2.4K). I will ask my RTR rep about these rate lock options.
- 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
@Pretty Khare can you share your numbers on how you are calculating that? I'm showing that the cash flow is still very positive (over $200 a month) with interest rates at 6.5% & rents staying the same at $2,400 a month (which we are already seeing rents go up beyond that in the $2,500 to $2,600 range). Surely a year from now when the home is completed rents will be much higher if the market continues as it currently is. All in all, I think the cash flow still makes sense, especially in a market that has higher appreciation, strong rental demand on a brand new built home that will attract quality tenants & have minimal maintenance. Also, we are working on reducing the mngt fees with our mngt partners to allow for more cash flow. They are open to the idea since new construction is very easy to manage with builder warranties in place to handle all maintenance. As you stated, if the cash flow is not as attractive as you anticipate, you can always liquidate the property for a gain to reinvest elsewhere. Everyone that has completed a build so far has had a tremendous amount of equity & many have elected to sell instead of hold just to cash in on the equity. Even though I recommend holding for a year to 1031, or doing a cash out refi. ; )
- Investor · Austin, TX · Member since 2021 · 83 posts · 80 votes4y
Quote from @Zach Lemaster:
@Pretty Khare can you share your numbers on how you are calculating that? I'm showing that the cash flow is still very positive (over $200 a month) with interest rates at 6.5% & rents staying the same at $2,400 a month (which we are already seeing rents go up beyond that in the $2,500 to $2,600 range). Surely a year from now when the home is completed rents will be much higher if the market continues as it currently is. All in all, I think the cash flow still makes sense, especially in a market that has higher appreciation, strong rental demand on a brand new built home that will attract quality tenants & have minimal maintenance. Also, we are working on reducing the mngt fees with our mngt partners to allow for more cash flow. They are open to the idea since new construction is very easy to manage with builder warranties in place to handle all maintenance. As you stated, if the cash flow is not as attractive as you anticipate, you can always liquidate the property for a gain to reinvest elsewhere. Everyone that has completed a build so far has had a tremendous amount of equity & many have elected to sell instead of hold just to cash in on the equity. Even though I recommend holding for a year to 1031, or doing a cash out refi. ; )
@Zach Lemaster I compared my pro forma with RTR’s and there are a few differences. I have insurance at $1800 per year based on the quote I got, you have it at $850 a year. You have 7% per year for property management, however your PM Kevin quoted me 8% + placement fees for a new tenant which would add up to about 9.5-10% per year on average. I will be a happy man if you negotiate this down :) Finally I have $100 per month (average) in expenses for monthly salt water treatment of the well and pumping out septic every 3 years. RTR pro forma doesn’t have these charges. Another big difference is the closing cost which we be 3-4x the $6k you have in RTR proforma if you go with the private lending option. I know lending costs will vary from person to person and based on whether they want to use it as an investment property or a second home. I think to be conservative, one should also add any other holding costs (potential delays for in inspections, property tax in the first year of build). When you add all these of these up, you barely break even on cash flow but could make a killing with the appreciation.
I am not saying these houses are not good investments, I think investing now is a big bet on rents and property prices continuing to go up in a market that is already one of the hottest in the US.
- 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
Great, thanks for sharing. You are 100% correct that the various loan options you use will affect the cash to close needed, but closing costs should not be factored into long term cash flow analysis. Just the first year acquisition analysis. I'm not sure about what is being included in your insurance quote. We run the pro forma at $850, but most quotes we see are $600 to $700. I can send you those insurance providers that quote those amounts if you reach out directly. I think $1,800 if far too high. My personal builds in the area have a $640 annual premium. This is definitely affecting your analysis. I can confirm we can get mngt to do better than 8%. That is the benefit to working with our network where we have negotiation power based on volume. The septic treatment will also be less expensive than quoted. I understand the want to be conservative in running analysis, but it's important to consistently be refining the analysis investigating all areas to lower expenses like with insurance. One other point to look in the first couple of years is property taxes. We show tax amounts above $3k which would reflect a full taxable value. It will likely take 2-3 years to be fully assessed to reflect that tax amount. Your first year the taxes likely will be less than $1k allowing quite a bit more cash flow than projected. The taxes will go up over time, but so will rents so that must be factored in to a proper analysis. Just some things to consider as you run some various analysis on this. Either way your slice it the equity is there to make this a great investment with plenty of options. In my experience it is very difficult to find new construction in a growing market, good neighborhood class that still cash flows & has significant, immediate equity. Side note, we are about to release some TX builds are in high demand. They are completed now, or will be soon. Not as much equity as these, but still cash flow well & obviously TX is one of the hottest places to invest currently. Stay tuned for those. Great discussion here that many people will benefit from reading. Feel free to reach out to me directly if you want to set up a time to go through this in greater detail.
- Investor · Rochester, NY · Member since 2022 · 43 posts · 65 votes4y
Quote from @Zach Lemaster:
@Pretty Khare can you share your numbers on how you are calculating that? I'm showing that the cash flow is still very positive (over $200 a month) with interest rates at 6.5% & rents staying the same at $2,400 a month (which we are already seeing rents go up beyond that in the $2,500 to $2,600 range). Surely a year from now when the home is completed rents will be much higher if the market continues as it currently is. All in all, I think the cash flow still makes sense, especially in a market that has higher appreciation, strong rental demand on a brand new built home that will attract quality tenants & have minimal maintenance. Also, we are working on reducing the mngt fees with our mngt partners to allow for more cash flow. They are open to the idea since new construction is very easy to manage with builder warranties in place to handle all maintenance. As you stated, if the cash flow is not as attractive as you anticipate, you can always liquidate the property for a gain to reinvest elsewhere. Everyone that has completed a build so far has had a tremendous amount of equity & many have elected to sell instead of hold just to cash in on the equity. Even though I recommend holding for a year to 1031, or doing a cash out refi. ; )
Lower management fees would be ideal. I had this same thought... They're new builds and I'm guessing we're locking these tenants in for 24 months to start. Not a whole lot to do on their part, which should be reflected in the management rates. That will likely be a huge factor when considering to sell or rent after completion.
- Investor · Member since 2022 · 2 posts · 3 votes4y
@Eduardo Barcena jr I've completed a few deals with R2R. Zach, Scott, and team are super accessible for questions. They do everything they can to take care of their investors. Do your due diligence on each deal to make sure you're comfortable with it, communicate with Zach and team, and you'll be in good hands.
- 4yZach LemasterBusiness MemberRental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
Appreciate the feedback & support Chris!
- Investor · Niceville, FL · Member since 2016 · 12 posts · 9 votes4y
I learned some very tough lessons with R2R. I was under contract with 2 properties in Kansas City, MO. One fell through due to not being able to clear the title, which ended up being a blessing. I started the process with them in August 2021 and closed on a single property in December 2021. The delay was due to rehabbing the property- which I was told and understood. Even after rehab, the appraisal came back low, and we split the difference on price and moved on. They had a tenant in place prior to close and I received the pro-rated rent for December 2021. I signed all contracts with the PM company they recommended and noticed that I didn't receive any sort of deposit in January for rent. Long story short I never collected a single cent of rent on this property. Never once did this tenant pay rent. Also, the PM company failed to ensure that the tenant had put the utilities in their name. (I now ensure this is done myself) So by February I was on the hook for a 380 dollar delinquent water bill from KC water due to my name being on the deed and had no recourse with the tenant. I finally was able to evict the tenant by April/May 2021 after lots of legal fees. After taking possession of the home I see that my "rehabbed" house is completely trashed. Appliances ruined, Holes in walls, fixtures removed, etc. I spent about 12k rehabbing it and sold it at a 16k loss (not including rehab costs) just to move on. I have 6 other rental properties so this is not my first rental or first eviction.
I don't necessarily believe this is on R2R, but wanted to share my experience.
Takeaways for me:
1. Just because you get pro-rated rent doesn't mean they are paying, or have ever paid - don't let that give you a false sense of security -tenant was placed in November so I didn't ask for rent history (My fault)
2. Bigger PM management companies doesn't mean better. I use a small company for my other properties and they have been fantastic. The one here used a call center and I never ONCE was able to speak to my PM, only their assistant or representative from the call center even when things weren't going well.
3. Having people in place that you trust in turn key investing is everything. I'm no stranger to investing out of state, and I assumed incorrectly that this would be similar to my previous experience.
I wanted this property to be my first of many with R2R, but it just didn't work out
- Investor · Niceville, FL · Member since 2016 · 12 posts · 9 votes4yTo follow up on my previous post:
Quote from @Kristen Whiddon:
I learned some very tough lessons with R2R. I was under contract with 2 properties in Kansas City, MO. One fell through due to not being able to clear the title, which ended up being a blessing. I started the process with them in August 2021 and closed on a single property in December 2021. The delay was due to rehabbing the property- which I was told and understood. Even after rehab, the appraisal came back low, and we split the difference on price and moved on. They had a tenant in place prior to close and I received the pro-rated rent for December 2021. I signed all contracts with the PM company they recommended and noticed that I didn't receive any sort of deposit in January for rent. Long story short I never collected a single cent of rent on this property. Never once did this tenant pay rent. Also, the PM company failed to ensure that the tenant had put the utilities in their name. (I now ensure this is done myself) So by February I was on the hook for a 380 dollar delinquent water bill from KC water due to my name being on the deed and had no recourse with the tenant. I finally was able to evict the tenant by April/May 2021 after lots of legal fees. After taking possession of the home I see that my "rehabbed" house is completely trashed. Appliances ruined, Holes in walls, fixtures removed, etc. I spent about 12k rehabbing it and sold it at a 16k loss (not including rehab costs) just to move on. I have 6 other rental properties so this is not my first rental or first eviction.
I don't necessarily believe this is on R2R, but wanted to share my experience.
Takeaways for me:
1. Just because you get pro-rated rent doesn't mean they are paying, or have ever paid - don't let that give you a false sense of security -tenant was placed in November so I didn't ask for rent history (My fault)
2. Bigger PM management companies doesn't mean better. I use a small company for my other properties and they have been fantastic. The one here used a call center and I never ONCE was able to speak to my PM, only their assistant or representative from the call center even when things weren't going well.
3. Having people in place that you trust in turn key investing is everything. I'm no stranger to investing out of state, and I assumed incorrectly that this would be similar to my previous experience.
I wanted this property to be my first of many with R2R, but it just didn't work out
The company that I purchased this property from has been removed from the RTR network since this was some time ago.
Also, during my experience, I did not reach out to anyone at Rent to Retirement to make them aware of the situation while it was happening.
Now that they are aware, they immediately reached out to me to come to a resolution.
Lastly, the majority of my issue was a non paying tenant and while R2R had nothing to do with that they still wanted to reconcile everything with me to ensure my experience was a positive one - Member since 2021 · 135 posts · 203 votes4y
Quote from @Kristen Whiddon:
To follow up on my previous post:Quote from @Kristen Whiddon:
I learned some very tough lessons with R2R. I was under contract with 2 properties in Kansas City, MO. One fell through due to not being able to clear the title, which ended up being a blessing. I started the process with them in August 2021 and closed on a single property in December 2021. The delay was due to rehabbing the property- which I was told and understood. Even after rehab, the appraisal came back low, and we split the difference on price and moved on. They had a tenant in place prior to close and I received the pro-rated rent for December 2021. I signed all contracts with the PM company they recommended and noticed that I didn't receive any sort of deposit in January for rent. Long story short I never collected a single cent of rent on this property. Never once did this tenant pay rent. Also, the PM company failed to ensure that the tenant had put the utilities in their name. (I now ensure this is done myself) So by February I was on the hook for a 380 dollar delinquent water bill from KC water due to my name being on the deed and had no recourse with the tenant. I finally was able to evict the tenant by April/May 2021 after lots of legal fees. After taking possession of the home I see that my "rehabbed" house is completely trashed. Appliances ruined, Holes in walls, fixtures removed, etc. I spent about 12k rehabbing it and sold it at a 16k loss (not including rehab costs) just to move on. I have 6 other rental properties so this is not my first rental or first eviction.
I don't necessarily believe this is on R2R, but wanted to share my experience.
Takeaways for me:
1. Just because you get pro-rated rent doesn't mean they are paying, or have ever paid - don't let that give you a false sense of security -tenant was placed in November so I didn't ask for rent history (My fault)
2. Bigger PM management companies doesn't mean better. I use a small company for my other properties and they have been fantastic. The one here used a call center and I never ONCE was able to speak to my PM, only their assistant or representative from the call center even when things weren't going well.
3. Having people in place that you trust in turn key investing is everything. I'm no stranger to investing out of state, and I assumed incorrectly that this would be similar to my previous experience.
I wanted this property to be my first of many with R2R, but it just didn't work out
The company that I purchased this property from has been removed from the RTR network since this was some time ago.
Also, during my experience, I did not reach out to anyone at Rent to Retirement to make them aware of the situation while it was happening.
Now that they are aware, they immediately reached out to me to come to a resolution.
Lastly, the majority of my issue was a non paying tenant and while R2R had nothing to do with that they still wanted to reconcile everything with me to ensure my experience was a positive oneGood to hear. Anything I've read through many, many posts of R2R is they are quick to intervene, problem solve, and work with their clients, even regarding issues that are no fault of their own. While I am still in the stages of working on new construction through them, and can't 100% vouch for what will come after that process, I remain confident in their support. Thus far they have been a great team, outside the team for the individual property. I wish you success with your property!
- Investor · San Francisco, CA · Member since 2019 · 26 posts · 33 votes4y
Looks like this post is old, but it came up in my feed so I thought I'd comment. I have purchased two properties from R2R in the last year, and both have turned out great, in terms of equity and cash flow. Feel free to reach out to me if you want to discuss any details.
- Investor · NJ · Member since 2022 · 154 posts · 223 votes4y
I have one Cape Coral build underway and have nothing but positive things to say. Everyone I have dealt with at RTR has been great to my wife and I and while I am looking at other opportunities besides turnkey, I check their inventory everyday to see if something fits. We've had in depth calls with @Zach Lemaster a few times and never felt rushed or unimportant. And I'm just a regular guy looking to pick up a couple properties, not some big whale that's going to make RTR rich by any means lol. Actually had a call with one of their reps Ben Smith 2 days ago about a few new leads and financing and it was a great call. I wouldn't hesitate to use these guys for anyone interested.
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