All Forum Posts by: Chris Clothier

@Alex Craig Nice job with the data and performance over there.  Also, loved the responses on here and learning from the negatives and teaching your kids to be 10s and not 7s.  Great leaders/entrepreneurs never shy away from the areas they can improve.  There is always the 2% to dig out and improve upon in the best of the best companies and we often learn when our clients are willing to share.  Great stuff.

Originally posted by @Aj Parikh:

Investment Info:

Single-family residence buy & hold investment in Cleveland.

Purchase price: $90,000
Cash invested: $22,500

1st out of state Turnkey Rental Property purchased from Martel Turnkey.

What made you interested in investing in this type of deal?

I wanted to explore out of state investing and also wanted to remain passive in my journey so turnkey rentals seemed the best way to explore that. The experience with Martel Turnkey has been amazing so far. We will know within a year if the investment was worth it.

How did you find this deal and how did you negotiate it?

Found the deal on Martelturnkey.com after listening to Antoine Martel on one of the mastermind calls

How did you finance this deal?

Conventional Financing

How did you add value to the deal?

Didn't add anything

What was the outcome?

Still to find out

Lessons learned? Challenges?

The closing date got pushed back 3 times because the renovations were not completed. I wish their website provided a better timeline of the whole process.

AJ,

I followed another one of your posts on BP about buying your first property with Martel.  I think one of the more frustrating things about BP forums - especially with Turnkey real estate - is that so few commentators ask if your expectations are being met?  Are you happy with the process?  Are you happy that you made this investment?  Are you going to continue investing in this way? Etc., etc., etc...

Instead, so many commentators judge other investors’ investments and posts about them through their own lens of expectation and to be frank, can be quite callous and rude.  

I can tell from the posts that you have made that you went forward with an investment that you were highly confident in making.  You felt very comfortable with Martel Turnkey and were excited.  I haven’t seen you lose any of that enthusiasm, even with all of the poking and prodding and endless questions geared to make you second guess your decision.  Too bad there were not a lot more “congratulations!”.

I hope you hit you expectations with Martel and are successful based on how you measure your success!  Best ~

@Anthony Hom Make sure you don’t attach your own understanding of what Turnkey should be or what you expect, with the word used in an advertisement.  They may not be the same thing or lead to the same experience.  

We've been working with Roofstock a bit and I am impressed with the improvements they've made and the direction they are going. I do think they are are going to become the dominant player in the ibuyer movement where investors are purchasing homes via an MLS type of vehicle and mostly sight unseen. However, remember, they are the conduit for the sale. They are not the seller. They did not do a renovation nor are they providing the management. I think they are going to go out of their way to make sure what is listed is accurate and from reputable people, but in the end, they can only represent what is being put on their site by the seller.

As for the advice from @Alyssa Dyer and buying a traditional turkey property at that price, if you define a turnkey as a property where someone else has purchased it, they have eliminated deferred maintenance so the investor should be able to limit capex and maintenance issues for a period of time, they have placed the property with a reputable management company that is equipped and prepared to manage the property for you, then by that definition not everything that uses the world turnkey for marketing purposes is going to fit. 

At the low price points of say $50-$60k and below, it will be extremely difficult for you to find a property where someone else has purchased the property, covered the holding costs, renovated it to a high level eliminating deferred maintenance issues and given themselves a profit.  Think of the idea of paying roughly $10-$20k for a property and then doing the work it needs to be a high quality property for another investor.  What type of area and what type of property would that be?

I agree with Alyssa that you can absolutely buy at this price and many active investors are very successful.  You may even be able to buy at this price and be a successful passive investor.  I just wanted you to be aware of the fact that because it says Turnkey does not mean much anymore.  You have to be clear on what that means to you and do the appropriate due diligence based on that definition.  It is extremely difficult to buy good properties in good areas, do the right work to them and market them for a profit with a sell price that low.

Hey @Ryan Planchon - congratulations and great job on continuing to build your portfolio!

Connect with @Alex Craig.  I believe he is operating in Knoxville(?) and so may have reach down into the Cleveland area.  I would start there.  Best, Chris 

Hey Mike,

Chris Clothier here, one of the owners of REI Nation. I would love to connect with you if that is ok. I have reviewed the notes in Salesforce and see that the resident is completing a 2-year lease in full and wanted to touch base to see how your experience differs from what I am seeing. We are committed to hitting your expectations and I welcome you to please share with me how we have missed them. You can reach me right here on BiggerPockets or direct message me a best numb er and time to connect.

Best, Chris

On a side note, I have a few thoughts on some fo the responses you are getting.  

I respectfully disagree with some of the advice given on here about locations.  Familiarity with a market means very little to your future success.  There is no best city for passive income.  There will be tons of valuable experiences that can be shared and there is a lot of information published about data, but none of it can tell you what is the “best market” for passive income.

In my opinion, most investors are less interested than they realize in monthly cash flow shown on a piece of paper and much more interested on the consistent delivery of a positive cash flow.  

Of course, cities matter and locations matter, but consistent positive cash flow, is realized by how well a property is renovated and managed.  The cash flow itself is created by using leverage, but the only way to maximize it is by reducing deferred maintenance, eliminating the need for capex for as long as possible and preventing vacancies.  That has little to do with the city and everything to do with who you use to provide the active services of renovating and managing your property.  

I’m not advocating in the slightest for going with a turnkey company.  There are plenty of ways to achieve passive income.  Your familiarity with a market will do little to help you maximize your passive income.  Your ability to discern who is the most professional or what is the most professional way to develop a team that reduces maintenance costs and vacancies will be how you maximize your cash flow.  

@Melinda A. Harleaux, being in Los Angeles does not mean you have to go across the country to earn passive income while owning the property.  There are many investors in your neck of the woods who invest in the Inland Empire for drastically lower that LA proper and you don’t have to go out of state.  The question is, can you duplicate what they have done as far as team to invest closer to home.  

I‘Ve been at this game for a very long time so hopefully no one is offended by my comments.  There is psychology involved here and simply buying in markets that you may be familiar with can cloud judgement with confirmation bias.  If you really want to invest in a market you are familiar with, then you will find reasons to do and ignore reasons not to.  If you simply look for the most professional way to invest and create the highest likelihood of consistent positive income on a property, then most likely, you won’t miss the most important aspects that will give you success.  Best to you!  

SDIRA Wealth.com is the new front for Morris Invest.  A poster asked about this company a few weeks back and just out of curiosity, I checked it out for them.  They thought it was odd that you could not find any real history on them although they claim a long history of success.  It maybe true, just hard to verify anything.  What was interesting was that the website listed the people on the team.  Almost every single one of them mentioned working for Morris invest and about a new partnership or combining of companies.  I can only tell you that from memory and I can’t quote exactly how they worded it, because since that posting the meet the team part of the website is gone.  You literally cannot tell anything about the company except this...

They encourage you to go through a freedom number program first before buying.  

They encourage you to set up a self directed Ira, perhaps that is a service they provide for you which would make them a custodian which would make the rest of the services they provide illegal or a violation of their licensing.  Then they introduce you to a portfolio of homes you should buy with that self directed ira where a vetted property management company will take over management for you.  Sound familiar?  The SDIRA prevents banking from being involved which may get around any lending related violations of the law (or that Is the theory anyway).  There is just enough non information on there to make it maybe look legitimate to a brand new investor.  And hey it may be straight up legit.  

But, then...I clicked the schedule a call button... You should check that out for yourself if you have any questions about who the company is or who is actually selling the houses.

Connect with @Jonna Weber.  Long time commenter and poster and super knowledgeable with that market.

 My families’ company is the only provider I I know of that is licensed in both states.  JWB (Jacksonville Wealth Builders) is a quality company in Florida and to be direct, there are several providers in the Memphis area that vary in price point and area concentration.  But as of right now, we have not operated as a seller in the FL market although that is on our white board as we grow.  Like I said, we are already licensed to manage property there, but not up and running just yet.

That wasn’t super helpful, but if you want some names of companies to start doing some due diligence on, let me know.