All Forum Posts by: Chinmay J.

 Hi Chinmay,

Not to keep the negative going, but even if you say you don't need to be paid a penny, any company that you want to join and expect to invest in you by teaching the business, won't want to do it.  There is an investment involved in someone who is not fully committed. 

If you want to make the jump but are nervous, you can try to become a loan processor, which can offer a steadier stream on income, but will need a full commitment.

Good luck! 

I own a mortgage company in Florida and I've been a lender for 34 years. I know you don't want to hear this, but I haven't seen someone be a good loan officer and hold a full-time role in a non-real estate-related field. I've seen realtors bring in a deal or two per month, but contrary to popular belief, being an MLO is not a part-time "I can do it on the weekends" job...not if you want to be successful. I was flipping/building 7-10 homes/month back in the day, but I couldn't run this company, support all of our loan officers, and be a great flipper at the same time. My wife kept up with that business while I focused on lending. I'm sure that's not what you want to hear, but it's the truth. I do hope it helps you. 

 I answered that right at the beginning.  If a company does not have the time to spend with any investor asking these questions, they probably are not a company you want to deal with anyway.  And if as you say most won't take the time, then that makes it much easier for those that do to stand out!

To me, this is really simple.  You have to be patient and take the time to make an educated decision.  Regardless of experience or even what you already know, these questions help get you educated on the how a company operates.  The easiest ones to walk away from are the ones that act too busy to talk to their future clients and answer their questions.  If they are too busy now, they are absolutely going to be too busy in the future when they are helping manage your investments.

This is how you go about screening turnkey companies.  I'm happy to give what I think are the best answers to these as well.  I made this list based on my own experiences and share it quite often here on BP.

Two important things to remember. One, if turnkey company does not have time to spend with you and answer your questions in detail and discuss them, in my opinion, move on. Two, a key about asking questions is to ask mirror questions.  A mirror question is where you ask what is the average vacancy rate each month. Write down the answer. Sometime later in the conversation you ask the mirror question of what is your average occupancy each month. Write that answer down.

A high quality company will be on top of their KPI's and their numbers will match. A 3.5% vacancy number will match a 96.5% occupancy number.

Lastly, after you have their numbers research what you were told. I'll never forget a conversation with an investor who was amazed that a turnkey company had a 1.5% vacancy rate and a 98.5% occupancy. It sounded amazing. He asked how many properties they managed and the answer was roughly 1500. He then went onto their website online and researched their property management online and was shocked. Their website listed 198 properties for rent. They had an ad online for prospective tenants advertising 200+ vacant rentals. Their true vacancy rate was roughly 13% not 1.5%. But they felt like they had to market a low rate to "keep up with the Joneses". So ask your questions, get your data and do your research.

Lastly, take nothing on faith!  Including my families' company.  We have a stellar reputation which matters, but you still have to ask the right questions and do your due diligence.  You still have to make us earn the right for you to trust us.  Often times, going and visiting a company in person is what seals the deal either in favor or against.  It is the only true way to determine if the answers you get match what you see in person.

Best of luck to you!

Are you an investor?

Do you own in the exact neighborhoods you are selling?

How many investors do you work with?

Do you own all facets of the operation?

Do you offer rental or maintenance guarantees? If they answer yes, ask them why. Then ask them if they will put the guarantee on year three.

Do you defer maintenance?

How many properties do you manage?

Do you own the properties you sell?

How long have you been in the business?

What is your average vacancy rate?

What percentage of expiring leases will renew their lease each month?

What percentage of signed leases fulfill their full term?

What is the average number of days a property is vacant between tenants, move-out to move-in?

What percentage of billed rent do you collect each month?

What is the cost of an average repair bill after move-out?

What are your management fees?

What percentage of collected rent goes to yearly maintenance on average?

What is your average number-of-months occupancy per property?

What is your average occupancy rate?

What programs do you have in place to keep residents happy?

What customer service programs do you have in place?

Will you call me every month with an update on my portfolio?

How many team members are dedicated solely to providing service to your clients?

What has been your biggest mistake as an investor? How do you protect your clients from making the same mistakes?

No worries, Dude, just having a little fun.....