All Forum Posts by: Mariusz Bojarczuk

Originally posted by @Ritch Bonisa:

It is ALWAYS ok to let a property go!  If you don't have enough info or if someone is pushing - let it go.  Willingness to let these things go - equals -lowering your risk. 

If you can afford to bet burned, then go for it.  If you can't, then it's ok if you miss out on the opportunity. 

Mariusz

Originally posted by @Tom Ott:

Originally posted by @Mariusz Bojarczuk:

Yes Tom,

That may be the case. I simply may not be a good match for their mode of operation. 
It would be honest to say it to me.
I saw positive reviews of this company and maybe they purchase many distressed homes and need funds to rehab them. It may be the reason they want to close before rehab. I just do not like this idea

Mariusz
Originally posted by @Tom Ott:

Originally posted by @Mariusz Bojarczuk:

Hi,

A turnkey company is pushing me into immediate action. I never bought a turnkey. I checked the prices of houses on the street my future property will be and all prices are 10 or 15 thousand less than the property I am being offered. 

What should I do? Back out of the deal? They are very insistent and say I cannot be stopping them from doing business by taking time to do my due diligence. I am shamed for not acting fast enough.

Thank you for any responses.

Mariusz

I would hope they are not "pushing." My only guess is that their inventory is low and they want you to get a good price? Sometimes with Turnkeys, the properties get sold very quickly, and if you have your heart set on one, it may be gone when you make an offer. 

 OH, That makes much more sense! That is NOT a Turnkey Provider. Closing prior to the rehab and then using YOUR money to fix up the property is something altogether different. A true Turnkey should be a property that is 100% renovated with a tenant in place at closing. You should earn money from day one. 

They are pushy because they need money for whatever kind of renovation process that is.

That may be the case. I simply may not be a good match for their mode of operation. 
It would be honest to say it to me.
I saw positive reviews of this company and maybe they purchase many distressed homes and need funds to rehab them. It may be the reason they want to close before rehab. I just do not like this idea

Mariusz
Originally posted by @Tom Ott:

Originally posted by @Mariusz Bojarczuk:

Hi,

A turnkey company is pushing me into immediate action. I never bought a turnkey. I checked the prices of houses on the street my future property will be and all prices are 10 or 15 thousand less than the property I am being offered. 

What should I do? Back out of the deal? They are very insistent and say I cannot be stopping them from doing business by taking time to do my due diligence. I am shamed for not acting fast enough.

Thank you for any responses.

Mariusz

I would hope they are not "pushing." My only guess is that their inventory is low and they want you to get a good price? Sometimes with Turnkeys, the properties get sold very quickly, and if you have your heart set on one, it may be gone when you make an offer. 

I would like to use conventional financing. My credit score is about 660 now. I was told by the company that it will take time to obtain conventional financing with my score and I can use their seller financing which is very fast. No terms were given though. I did remember however that some time ago the same company told me the rate of 10% and interest only. Now they changed to 10 year financing with option to pay down the principal, but again no rates or numbers given.

I am staying in touch with another company. They offer contacting me with local banks they work with. I never heard I am taking their time or ask too many questions. Quite the contrary. I am encouraged to ask questions and was invited to come down to meet the staff and see the work done. If I need to wait a few months to obtain conventional financing and purchase a home I am comfortable with, I will. I am not here to get rich. I want some stability and security. I am an immigrant and have worked very hard for 16 years to get established, started out with nobody believing me my diplomas are worth anything, finished another university to prove I can do my work, I got my other degree accredited, and have been working 6 days a week ever since. 

I struggled and managed to buy my home two years ago. Now, I am very careful not to lose what I have worked for for so many years. I can wait and raise my credit score. 

Just a story of my life. I do not think anyone has the right to tell me I am doing somethig wrong when I want to protect myself. The company I have not disclosed the name yet (I do not want to give a bad name to someone, who may be a suitable partner for different kind of investors) is not so forthcoming. I hear genralities, I hear I have to trust them. Thanks to yours and others inout, now I feel I can ask direct questions and expect answers. It is my money and they need it. Bith parties should benefit from the transaction.
Mariusz

Originally posted by @Ali Boone:

Hey Mariusz! Well, a couple things. 

First, just regarding your post, I was initially going to say (before you gave more information later) that there is a fine balance with turnkey companies in terms of the promptness in which you typically need to act. I've seen some investors spend so much time on due diligence and gunning after the turnkey company that it really does start to put the company in a bind for having to continue holding the property and turnkey companies usually move fast and have no interest in working with someone who will hold them up that long [often emotions-driven on the buyer's part] and they will refuse to work with that buyer. On the other side of that though, is more like what you ended up describing. It sounds like they were being jerks and rushing you to un-cool levels. There is a 'reasonable' amount of time for due diligence and acting. If they are pushing you to act faster than that amount of time, they definitely suck. If you are causing them to spend more than that amount of time, they could tell you to take a hike.

Second, between the company you initially posted about and then the company trying to get you to buy non-turnkey properties, it seems like you are somehow finding the shadiest of the shady for turnkeys. Where are you finding all these companies?

To answer your specific question about the legitimacy of a turnkey company trying to sell you, essentially, a non-turnkey property- no, don't do it, it's dangerous. One of the largest benefits of turnkey is supposed to be that you can verify everything before you close. If you don't, the risk ends up on you. Think about it- before you close on a property, all of the risk is on the seller. After you close on a property, all of the risk is on you. So you're not going to want to buy something you can't verify and accept that risk. Especially not if it's a turnkey property.

I have seen two exceptions to this-

1. If there's some kind of unfounded delay on a turnkey property and the company really wants to offload it for whatever reason, I've seen sellers occasionally offer guarantees on the risk items so it makes it worth you closing. Rental guarantee to ensure rent amounts, etc. I wouldn't do this or accept this unless it was a provider you really trust, but I've seen it happen. I actually don't know if I would accept it from a seller I trust. I may just pick out a new property that can be ready faster. This happened much more back in the old days than currently, but regardless, you're still accepting the risk if you buy it undone. 
2. There is the BRRRR+turnkey strategy/model where you fund [in cash] the distressed property and the rehab, so you are definitely buying a property pre-rehab and pre-tenants. But this model goes back to the idea of who is holding the risk. It's you in this case. The turnkey provider I work with these properties on though offers guarantees for all the major risk items, and I had worked with them for years previously. So I trust them. A random company offering this, because the risk gets put on you, you should be leery.

What is your budget/price range? Is there a reason you have found seller-financing deals (of which I've never heard of a turnkey provider offering) and someone trying to sell you $30-50k properties? How low is your budget? Both of those have major red flags. And a balloon payment? You could lose everything you own faster than you could see it fly out the window. Fixed loans only whenever possible, as other posters said.

I just wrote to the company and asked simple questions about the terms of the new loan offer. I asked if I can buy a fully rehabbed property.
I will share the name if I do not receive the answer or I am again told that I hesitate too much. I am only asking for numbers for God's sake. What is the hesitating part about? I do not know.

Thank you,
Mariusz

Originally posted by @Matt K.:

That rate is terrible, I just was offered a deal not to long ago near 5% with like 25% down 30yr ...owner finance. Granted it was a much higher dollar amount, but still 10% long term, no thanks lol.

Plus, look at the % you're overpaying for these houses, 10-15k on a 60k house is rough (I don't know your exact numbers but the point is the same). Do us all a favor and name this TK company.

Thank you. Your experience is very valuable to me. You confirmed what I thought. Closing without the ability to have the property assessed or appraised is risky. It was not explained to me what legal protection I have if the company does not finish rehabbing or does poor work. 
That is why I am so worried. When I said I do not want to continue cooperating this way because of the loan terms and the way property is purchased, I was told the price may be lowered if I decide to buy. And I do not believe I am taking anyone's time because I only inquired about properties and never committed to anything. So, now I received an email stating I can buy 70k home for 18k down payment and seller financing. Now the interest only balloon loan is changed, so that I will be allowed to pay principal. But still, I was not told the interest or what legal protections I have to make sure the house will be fully rehabbed. It seems that the most essential information is never given. I start to feel like my time is being wasted. When I ask questions, I am told trust is important.
Thank  you again Ali. 
Mariusz

Originally posted by @Ali Boone:

Hey Mariusz! Well, a couple things. 

First, just regarding your post, I was initially going to say (before you gave more information later) that there is a fine balance with turnkey companies in terms of the promptness in which you typically need to act. I've seen some investors spend so much time on due diligence and gunning after the turnkey company that it really does start to put the company in a bind for having to continue holding the property and turnkey companies usually move fast and have no interest in working with someone who will hold them up that long [often emotions-driven on the buyer's part] and they will refuse to work with that buyer. On the other side of that though, is more like what you ended up describing. It sounds like they were being jerks and rushing you to un-cool levels. There is a 'reasonable' amount of time for due diligence and acting. If they are pushing you to act faster than that amount of time, they definitely suck. If you are causing them to spend more than that amount of time, they could tell you to take a hike.

Second, between the company you initially posted about and then the company trying to get you to buy non-turnkey properties, it seems like you are somehow finding the shadiest of the shady for turnkeys. Where are you finding all these companies?

To answer your specific question about the legitimacy of a turnkey company trying to sell you, essentially, a non-turnkey property- no, don't do it, it's dangerous. One of the largest benefits of turnkey is supposed to be that you can verify everything before you close. If you don't, the risk ends up on you. Think about it- before you close on a property, all of the risk is on the seller. After you close on a property, all of the risk is on you. So you're not going to want to buy something you can't verify and accept that risk. Especially not if it's a turnkey property.

I have seen two exceptions to this-

1. If there's some kind of unfounded delay on a turnkey property and the company really wants to offload it for whatever reason, I've seen sellers occasionally offer guarantees on the risk items so it makes it worth you closing. Rental guarantee to ensure rent amounts, etc. I wouldn't do this or accept this unless it was a provider you really trust, but I've seen it happen. I actually don't know if I would accept it from a seller I trust. I may just pick out a new property that can be ready faster. This happened much more back in the old days than currently, but regardless, you're still accepting the risk if you buy it undone. 
2. There is the BRRRR+turnkey strategy/model where you fund [in cash] the distressed property and the rehab, so you are definitely buying a property pre-rehab and pre-tenants. But this model goes back to the idea of who is holding the risk. It's you in this case. The turnkey provider I work with these properties on though offers guarantees for all the major risk items, and I had worked with them for years previously. So I trust them. A random company offering this, because the risk gets put on you, you should be leery.

What is your budget/price range? Is there a reason you have found seller-financing deals (of which I've never heard of a turnkey provider offering) and someone trying to sell you $30-50k properties? How low is your budget? Both of those have major red flags. And a balloon payment? You could lose everything you own faster than you could see it fly out the window. Fixed loans only whenever possible, as other posters said.

Originally posted by @Caleb Heimsoth:

@Mariusz Bojarczuk no I haven’t.  You’re not going to want to do seller financing at 10 percent.  You can beat that rate a lot of different ways today. 

Originally posted by @Jay Hinrichs:

My dads attorney told me when I was just a fresh 18 YO agent..  Son  Deals are like street cars there is one on every corner..

have no clue about these companies or what have you but plenty of inventory there will always be something to buy.

like @Chris Clothier stated though in major MSA's urban core 30 to 50k houses are only appropriate for local professional landlords that can live and work that tenant base.. most out of areas folks that buy those end up not having a great experience and just end up losing money when they sell.

Yes! Thank you Caleb. Have you ever bought with seller financing?

Originally posted by @Caleb Heimsoth:

Mariusz Bojarczuk I’ve heard of Memphis buy and hold. They tend to deal in properties that cost less than other companies. I believe they do rehabbed and non rehabbed, but I could be wrong.

A good turnkey property in Memphis will start at 70k or so and above. When I say turnkey I mean fully rehabbed. I’ve bought two of these type of houses and so far they have done very well. These will be in B or B minus areas.

Hope this helps !