All Forum Posts by: Abdul Azeez

@James Wachob No offense but my experience with standalone PMs in Memphis has not been optimal. The first PM I hired (with recommendation from BP) turned out to be a dud letting my property sit vacant for 3.5 months. I eventually had to replace them with another one who performed repairs around $1000 and forgot to inform me although the PM agreement explicitly says that I need to approve anything over a certain threshold. I eventually had to settle this amount after a long discussion. I am looking for TK providers who own their PM firm as I believe they will have more skin in the game as they are servicing a property they sold. Again, I dont have the experience. So, I do not know if this would be a better option. All I know is that I have tried Option A (standalone PMs) and Option B (TK + PM) is not something I have tried, so I naturally assume this is going to work better. But only time will say.

Getting back to my original questions:

1. Are there other landlord friendly markets outside of Memphis, TN that I can consider?

2. Can you provide references to agents or turnkey companies in those markets?

3. I live in NJ. Given that it has high property taxes and is called a not so landlord friendly state, would you recommend investing here?

Folks - Can anyone advise where the best markets are for owning multi-family TK rentals with a conventional financing and recommended TK providers who preferably have PM under their own umbrella? If you feel the information is sensitive, please PM me.

Also TKs in Memphis are focused on SFH. Is there a way to get into Multi family (turnkey?) and what markets would you recommend (with key players / contacts)? Please PM me if you feel sensitive posting information here.

Hello - A while back there was a BP research on best markets. Does anyone know the link?

Folks - I purchased a property in Jan 2017 in Memphis, TN and the following is the analysis over the last five months. 

As you see, net income is -$5206.15. A few key things:

1. The reason for negative net income is because of 3.5 month vacancy. I fired my first PM and replaced with a new one that got a tenant on Apr 20. 

2. The reason for May income (rent) reduction is because the pro-ration of the rent was done in the second month with first month being full month rent. 

3. The rehab costs are the ones you see in repairs that I have to expense since I have had to first purchase the property. 

4. The cost in the Other section is mortgage principal and escrow during the months of Mar to May. 

5. From a cash flow perspective, I am -$3490.97 with additional coming due for the rehab costs that have been expensed but have not hit cash flow yet. I am still hoping that when the rent starts smoothening out in upcoming months my net income is probably going to tend positive. 

The reason I offer this is because this has been a good learning experience with rehab and vacancy being the key drivers of negative numbers below. I am in the market for my next property investment and am talking to a turnkey provider in Memphis, TN. My assumption is that the property will be cash flow positive from Day 1 due to their quality of rehab and pricing the rent below market which can reduce vacancy. Since my first experience going out on my own has not been optimal, I want to find out a few things and would appreciate advise:

1. Are there other landlord friendly markets outside of Memphis, TN that I can consider?

2. Can you provide references to agents or turnkey companies in those markets? 

3. I live in NJ. Given that it has high property taxes and is called a not so landlord friendly state, would you recommend investing here?

4. It's getting a bit cumbersome to track expenses, equity etc. by Excel. Would you recommend any specific s/w program? I saw a lot of discussion on Quickbooks versus Quicken.

Regards,

Azeez

It was rented for $995 within a month of agreement sign in to tenant move in. I have transferred to Reedys. I did have to incur a bit of rehab cost (about $600 or so) as the feedback they provided was that there was an overpowering pet odor which had to be deep cleaned and lock changed.  I am not there and so I do not know how important this was or not but it is rented now. I still need to wait and watch how the performance would be.

Wanted to share an update. Received my first check this month after the new PM rented it out. Jury is still out on performance of the asset in upcoming months. I will wait and watch but for now it feels good to receive something that validates the asset.

@James Wachob Thank you for the referral to the PM. I will keep you posted if I have any issues.

@Liz C. Don't go with blanket percentages as there are too many factors to consider. I live in NJ as well. Take a look at my thread here-> https://www.biggerpockets.com/forums/311/topics/41...

All the percentages were thrown out of the window based on my experience. With a 3 month vacancy and a reduced rent, I am only expecting an equity build up. People rightly pointed out to me that equity build up is more important than monthly cash flow. That's what I am counting on now. 

That ship has sailed Diane. Too late for me to question the decision to invest out of state. I believe one of the reasons people invest out of state is because of instate becoming too expensive.

 Eric - thanks. I agree with you. However sitting so many miles away I do not know if price was the only issue. The new PM told me that the house had a very strong pet smell when opened and strongly recommended a deep pet cleaning which is one of the items I approved. Did the house really have a pet smell? I do not know but hey it's rented. This is the kind of input I would have expected from my first PM but which unfortunately did not happen. The pricing feedback which the second PM provided to list at $995 when they took over the rental is also something I would have expected from the first PM but did not happen. Will the second PM now deliver in management? I do not know. That only time will tell. But I get a distinct feeling that some of the companies that do offer good value to investors are not on BP. 

Regarding your point on certain companies being touted in BP, I cannot agree more. In my case, I went with the mortgage company being recommended here constantly. It was a nightmare to deal with. The guy who was recommended here and who talked very smoothly with me left the company after accepting my loan. The experience was really bad to deal with an out of state mortgage company spread out all over the United States after his departure. He was not even professional enough not to accept my loan when he knew he was leaving and the only reason I came to him was because of the BP recommendation. That's a story for another day. I could start a thread on that.

The experience has been truly eye opening. Let's see how this works out.