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
- Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes4y
I've worked with several R2R investors and spoken to many more and they all speak very highly of the R2R team. These have been unique, and often challenging times from the construction perspective. Unforeseen issues often come up during construction in normal times, but even more so in the last couple years with materials and labor shortages, permitting delays, among other challenges. It's encouraging to hear that R2R investors can easily reach Zach and his team for information and help in navigating the process.
- Investor · MI · Member since 2021 · 21 posts · 7 votes4yHi Patrick! Now that it’s been a little over a year since you’ve started this first deal, could you provide some insight as to how your experience has been?
Quote from @Patrick Bavaro:
@Eduardo Barcena jr I am actually starting my first deal with their company right now for one of the new build properties in Cape Coral, FL. So far, the rent to retirement team and the builder they're using have been very responsive and helpful. Scott has been exceptional in his help and advice as well. I will let you know how progress goes as I continue in the process!
- Bay area, CA · Member since 2021 · 383 posts · 306 votes4y
Dylan,
I also have a deal with RTR. Are you still interested in learning more about it? Are you also looking to invest?
--Ruchit
- Member since 2022 · 3 posts · 2 votes4y
@Patrick Bavaro Congrats on your next rental. I’m interested in working with R2R, and the Cape Coral market is interesting. Can you clarify your experience with mortgage payments after closing but during construction when you are not receiving rent payments? Do you buy the land and pay the builders upon completion? In other words, what are the holding costs during construction on a new build? Thanks!
- Bay area, CA · Member since 2021 · 383 posts · 306 votes4y
Quote from @Andrew Raissis:
@Patrick Bavaro Congrats on your next rental. I’m interested in working with R2R, and the Cape Coral market is interesting. Can you clarify your experience with mortgage payments after closing but during construction when you are not receiving rent payments? Do you buy the land and pay the builders upon completion? In other words, what are the holding costs during construction on a new build? Thanks!
I can answer all those questions. Message me and we will connect. Texting works for general advice, but not for specific Q&A.
In general, total interest throughout construction should be calculated and kept in mind before signing a deal, it's not much. Don't forget, interest is only on the money borrowed, so first few months, you barely pay $100.
- Member since 2021 · 10 posts · 9 votes3y
I have not purchased through Rent to Retirement, HOWEVER I did purchase a supposedly "turnkey" property from one of their Kansas City suppliers. So a property from one of the same rehabbers you might be buying from if you buy through Rent to Retirement. It was very much a less than great experience. They refuse to answer questions about discrepancies in documents I was given, despite repeated requests. My turnkey middleman (which is what RTR serves as, an intermediary and not the actual rehabber) even intervened and they have ghosted him.
- Investor · Kansas City, MO · Member since 2015 · 48 posts · 165 votes3y
We are not sure how to respond to this post. You stated you did not buy through the RTR network, and then went on to mention you had issues with your property. I don't think this should be a reflection on RTR if you did not purchase from our team in this area. I'm sure everyone would appreciate it if you would be specific on exactly who you purchased the home from & who you are encountering issues with for transparency. That is what these forums are for. Otherwise I don't think this post is adding value to the BP community as a whole. If you did not purchase through the RTR network, then this should not be a reflection in any way on RTR. For the record, we have one contractor we work with in the KC market. His name is Andrew Ross, and we have many clients that have had a great experience working with him for years now. RTR is a licensed MO broker and has a very meticulous vetting process we follow for anyone that wants to join our network. We have accepted less than 3% of the contractors/builders/brokers/sellers/property managers that want to join our TK network because they do not meet our standards. A post like this is probably best on its own thread talking about the people/team you actually worked with in KC since it was not RTR.
- Member since 2021 · 10 posts · 9 votes3y
- Member since 2021 · 10 posts · 9 votes3y
I would like to update my post to clear up confusion. I did not purchase this property through RTR, and the issues I encountered had nothing to do with them. The owner of RTR, Zach Lemaster, reached out to offer his expertise and assistance with the issues we were encountering even though this was not one of his properties. We very much appreciate his willingness to assist. I'm very happy to say that we are headed in a better direction with the property after speaking with him today and hearing his advice on the situation. It is clear that he cares about investors' success even for those not doing business with his company. That goes a long way to show how he runs his company and team. The next time we are looking to invest in a turnkey rental property, we will highly consider working with his team. Thank you Zach!
- 3yJeffrey AscoughPro MemberRental Property Investor · Forked River, NJ · Member since 2020 · 22 posts · 8 votes
@Patrick Bavaro Just curious if you have another update? Is your new build completed yet? Has it even started? I am currently stuck in this process and interested to hear if you're delays ever ceased to exist or if you are still dealing with them? Seems like we got in on this deal around the same time.
- 3yJames F.Pro MemberRental Property Investor · Pompano Beach, FL · Member since 2021 · 31 posts · 6 votes
@Jeffrey Ascough, @Patrick Bavaro
I closed on my Cape Coral lot in July 2021. Would LOVE to discuss how this process has gone for you two gentlemen and you’d probably be interested to hear how it’s gone (and still going!) for me. Reach out anytime.
- Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes3y
I spoke to a new construction project manager yesterday in Cape Coral on behalf of a client who's been waiting for his home to be completed. The PM said the hold up is LCEC (the electricity provider in the Cape) has been delayed in connecting power to the house. They're backed up from hurricane-related repairs/cleanup which have taken priority over any new construction work and connections. Others may be facing similar delays by LCEC.
- 3yJeffrey AscoughPro MemberRental Property Investor · Forked River, NJ · Member since 2020 · 22 posts · 8 votes
@James F. Messaged you.
- Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes3y
@Jeffrey Ascough Happy to update! We are currently in the process of starting to go vertical. Finished the foundation about a month ago, but had some delays with Hurricane Ian. The next draw of funds just took place. According to the builder, it should take 6 months to finish. We will see. Overall, R2R and @Zach Lemaster have been true to their word and great to work with. I still have some things to work out with the builder, but its to be expected with any new build project. Progress is slower than I'd like with the builder, but its still progress. Feel free to reach out with any direct questions. Im planning to do some other new builds with R2R as well.
- Investor · NJ · Member since 2022 · 154 posts · 224 votes3y
Quote from @Patrick Bavaro:
@Jeffrey Ascough Happy to update! We are currently in the process of starting to go vertical. Finished the foundation about a month ago, but had some delays with Hurricane Ian. The next draw of funds just took place. According to the builder, it should take 6 months to finish. We will see. Overall, R2R and @Zach Lemaster have been true to their word and great to work with. I still have some things to work out with the builder, but its to be expected with any new build project. Progress is slower than I'd like with the builder, but its still progress. Feel free to reach out with any direct questions. Im planning to do some other new builds with R2R as well.
Thanks for the update @Patrick Bavaro my Cape Coral permit was finally approved last week so I'm expecting some good things in the coming months. Delays are to be expected, especially down there in Lee County. I just went into contract on an Oklawaha build through RTR as well, completely different part of Florida but I love the proximity to The Villages which is a good market. I have some other things in the works with RTR and plan on building a nice portfolio with them this year and continue the relationship. Turnkey/passive is the main component of my strategy and RTR is a perfect fit. @Zach Lemaster has been a pleasure to work with, type of guy that should be an example of how business is done. Good luck on your builds Patrick, hit me up if you ever want discuss RE. All the best...
- Bay area, CA · Member since 2021 · 383 posts · 306 votes3y
Quote from @Patrick Bavaro:
@Jeffrey Ascough Happy to update! We are currently in the process of starting to go vertical. Finished the foundation about a month ago, but had some delays with Hurricane Ian. The next draw of funds just took place. According to the builder, it should take 6 months to finish. We will see. Overall, R2R and @Zach Lemaster have been true to their word and great to work with. I still have some things to work out with the builder, but its to be expected with any new build project. Progress is slower than I'd like with the builder, but its still progress. Feel free to reach out with any direct questions. Im planning to do some other new builds with R2R as well.
Thanks for the updates. Helps a lot. Do you mind stating specific dates of when did you bought land, closed on the loan, got permits, etc.
Thanks again.
- Member since 2021 · 135 posts · 203 votes3y
Quote from @Patrick Bavaro:
@Jeffrey Ascough Happy to update! We are currently in the process of starting to go vertical. Finished the foundation about a month ago, but had some delays with Hurricane Ian. The next draw of funds just took place. According to the builder, it should take 6 months to finish. We will see. Overall, R2R and @Zach Lemaster have been true to their word and great to work with. I still have some things to work out with the builder, but its to be expected with any new build project. Progress is slower than I'd like with the builder, but its still progress. Feel free to reach out with any direct questions. Im planning to do some other new builds with R2R as well.
Glad to see your update, and glad to see you are making some progress. I hope your progress continues with the updated proposed timeline! @Patrick Bavaro
- Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes3y
@Don Miller thanks, Don. Send me a text or DM and I’d be happy to send you the photos of where my build is at, and what an almost complete build looks like. It looks like a really nice product
- Lender · Member since 2022 · 10 posts · 9 votes2y
Hello,
Has anyone found the Rent To Retirement folks to be helpful for properties in Akron? We currently have properties in Toledo and are looking to expand to the Akron area. Have you found their services are useful for BRRRR only or for just turnkey only?
Thanks. - 2yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Quote from @Michael Fish:
Hello,
Has anyone found the Rent To Retirement folks to be helpful for properties in Akron? We currently have properties in Toledo and are looking to expand to the Akron area. Have you found their services are useful for BRRRR only or for just turnkey only?
Thanks.Hi Michael,
Why Akron?
I feel Toledo and Akron to be quite similar markets when it comes to cashflow.
For example Detroit and Columbus offer more potential for appreciation IMO although with a lower cap rate.
Diversifying is ok to do but I wouldn't diversify from "cashflow to cashflow" in the same state and would more so diversify from "cashflow to appreciation" and in a different state per se.
Just my opinion and easier said than done lol
Much success 🙏
- Bismarck, ND · Member since 2017 · 56 posts · 201 votes2y
Looks like this thread has been a bit outdated. I'll update on my experience since I've been investing with Rent To Retirement for over 6 years now acquiring 17 properties in 5 different states.
I would say that overall, my experience has been very good. I've had more properties that over performed than underperformed, so overall my portfolio is doing better than expected, which is a good thing! The properties that have performed the best are new construction properties in FL & AL that were already built when we bought them. The AL properties were already leased. The new builds have definitely outperformed the older, rehabbed homes over time, even though the numbers may not look as good upfront. Most of these new builds have appreciated like crazy both in home values and rents. My recommendation is to look at new construction in growing areas for anyone considering this strategy. I have generally have a very good experience and will continue to invest with RTR. Their involvement in helping me build an individualized investment strategy has been paramount in getting me where I am today along with the resources they've shared for tax strategy has likely saved me 6 figures in taxes over time!
I shared more of my earlier experience on this thread:
https://www.biggerpockets.com/forums/92/topics/518583-feedba...
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