All Forum Posts by: Chris Clothier

 Hey Eric,

I'm personally exploring higher end deals because that is where my portfolio is today.  I have a base, a solid framework of median priced (for the market) investments.  I personally am ready to build my portfolio at prices points that are, in some cases, double the median price point and I am structuring them at break even.  Depending on how they are structured, these would be 2-4% cash-on-cash return properties with a higher opportunity for appreciation.  These are properties that without a doubt I am holding in a portfolio that will be transferred to my kids.

An out of state investor may be interested in these types of investments, but not my companies traditional investor.  We do those 600-700 deals a year in a very particular box and our marketing and portfolio plans follow the guidelines of that box.  There are fewer investors out there today looking for an investment at these higher price points and we re not marketing for investors looking for these types of deals.

To your point, we do have investors every once in a while that want these types of investments and in those cases, we will show them these kinds of deals and see what they think.

Lastly, when you say higher class resident, you mean one that can afford higher rents, correct?  Trust me, rating residents as classy is impossible.  A resident paying $3,000 a month in rent can do just as much if not more damage to a property as someone paying $800 a month in rent.  As well, being able to afford a higher rent does not mean they will be any cleaner, pay any faster or treat a property better.  The stats tell us they do, but believe me, when they don't perform that way, it can be just as bad.

So the reason for not building our business model on these properties is that a vast majority or investors are not looking for this and we are all about building an efficient business based on what the numbers tell us.

Best to you ~

 Nick,

Thanks for taking time to listen to the podcast.  I will absolutely be reaching out for some lead-up tips these last few weeks before the run.  This final prep is probably where I have the most questions.  Thanks again for listening and my families' company will be here ready to help however we can if you decide to check us out for passive, turnkey investing!

Best to you -

Chris

 Thanks Anthony!  

 Feel free to reach out to me Andrew on Messenger.  I will help however I can!

Chris

@Mindy Jensen "Oh, and just for fun,...." LOL!!!!!!!!

@Tomer O., that is an awesome way to intro. yourself!!

Very cool and very inspiring way to live.  Take a listen when you get a chance to this weeks podcast.  I shared with Josh and Brandon a little more about where our company is now (I appreciate the shoutout in your post) and also a challenge I have been training for - a 100-mile ultramarathon.  Nothing like lifestyle design like van-life, but still taking a shot at doing something big while I can!

My advice right now is to be patient.  Don't label doing your homework and getting a solid, workable plan together to make smart decisions with you money as paralysis by analysis.  Lean on your parents for advice as well as look for voices right here on BP that you can trust.

There is no need to rush.  You are going to get bombarded on here with ads and solicitations to buy Turnkey all over the midwest.  Especially since you mentioned you have cash and don't want to get bogged down.  You can invest passively and with that decision made, you can literally invest anywhere that fits your plan.  That means when you have researched markets, sought advice from experienced passive real estate investors and spoken with potential partners or team members you are going to need, you can make a sound decision.  Just be patient and enjoy learning a bit about how to be successful as a passive investor!

To echo @Curt Davis, I don't know a thing about the Marshall Reddick Co's, but I believe their set-up is as an advisor company.  They are not a Turnkey company in that they do not purchase, renovate and then manage property.  They have arrangements with companies to provide properties to their clients for a fee from the company and they then work with clients to purchase those properties.

Nothing wrong either way, it will be up to you to decide which you prefer.  Just wanted to point out as you begin to review options and learn a bit more, there are lots of companies and individuals that use the marketing term 'Turnkey".  There is a difference between advisory companies and on-the-ground providers.

I think the point is, Spartan is doing it and the CEO is telling the client that on-going communication is something they value.  That is a big deal.  They understand that communication is super important and it becomes part of their ov er-all "value" to an investor.

As for what you tell them when you call...you build relationships and sometimes the conversation is about the portfolio and sometimes the conversation is personal.  Depends on the investor and what is happening with their properties.  It is all about building a real relationship.  As Clayton said, in the end it is all about building a long-term relationship.  Companies that understand this will be the ones that grow, sometimes very quickly, and they will be the companies that have ridiculous customer loyalty and satisfaction.  

@Elizabeth Wilson, this will not be much of a market mover if any at all.  It is simply another online portal to list your houses and hope a buyer on the other end buys.  I would agree with @Alex Craig after looking at the houses that the site is always going to have credibility issues.

Doesn't mean that some people will not buy.  It will be the most vulnerable investor though that will get hurt.  The ones from high-tech industries in high-tech areas that put all of their faith in technology.  Investors who take time to do proper due diligence and build personal relationships, which is what really makes a successful passive investor, will never use a program like this to buy houses. In my opinion..... 

@Jay Hinrichs, the funny thing about monthly calls to a client, the bar is already set so low for out of state investors.  In my experience, most come into an investment expecting the worst and happy if there is any communication at all.  To have a company that says they will call you monthly and actually do it is a HUGE differentiator when it comes to buying Turnkey properties.  It is why we do it, it is why JWB in Jacksonville does it, and it is why Spartan does it.

I actually had a TK company come visit me for advice in our offices who advertised their great customer service and the fact that they called clients monthly.  He was astonished when I introduced him to our seven customer service team members.  He told me they only said that because they saw us saying it.  They didn't actually do it because they didn't believe we actually did it.  It was unbelievable.  So the fact that a TK company provides a monthly call once you own the property should be seen more as a long-term commitment than anything else.  

So, why don't more do it?  It takes that commitment to long-term.  It takes big money, time, team member commitments.  A company has to hire someone full time to handle a position like this.  And then a commitment to hire more team members as you provide service to more investors.  It takes a firm belief that by providing better communication and raising the bar for what investors expect,  you will attract your ideal clients.  Ideal clients are those that are buying not because a piece of paper says they will get a good return, but because the actions of a company and the commitment they show to being great tells an investor that they will be able to sleep well at night.  @Chris A., this fact should provide you with a lot of comfort at this point.

So even if the conversation is nothing more than everything is going great with your property, providing that contact, that monthly check-in, that call each month is a really big deal.  At least it is to the investors that I want to attract...

@Scott Baker, I'll second what @Andrew Johnson said in his comments.  There is no consensus.  The word Turnkey has no meaning and is simply a marketing term.  More and more are using it to gain attention and eyeballs to their ads or posts or what-have-you, but unfortunately, companies and even individuals will define the word differently.

Be open to doing some research.  You said you have cash ready to go, but you need to be patient and take your time.  Do not try and force a property, or a market or even a team to work for you.  You are correct that there are some big companies who manage a lot of properties and have been in business for a lot of years.  However, there are not many of us!  There are a lot of newcomers to this niche.  Size or time in business does not make one company better that another and certainly does not mean that a smaller or newer company may not be a perfect fit for you.  Just be open and patient and be willing to put in a little time researching and learning.

Lastly, it is perfectly common for a high-quality turnkey company to have preferred lenders.  Why?  They have developed relationships with lenders and speaking only from the perspective of our company, they know which lenders are actually going to close!  Unfortunately, many lenders have no experience working with out-of-state closings or an investment property.  They are not aware of what hurdles their closing departments will encounter to get your loan actually closed.  That is the point of using an experienced lender with a history or actually being able to close investor purchases where the investor is in one location and the property is in another.

Now, you should have choices.  Having to use only one lender or else you cannot buy, that is a red flag.  But, my history of networking with other TK companies is that lender lists are usually developed as referrals from a buying client.  The investor wants to use their lender or makes a recommendation that they want to use their lender.  That experience goes well and then that lender is added to a companies list of approved lenders.  That is very common with companies that are going to really value the amount of time that everyone, including the investor, spends trying to get a purchase closed.

I would not see that as a negative depending on how many lenders you can choose from and the fact that a company would be willing to hear from and speak with your lender as a possible lender for your deal.  That is definitely not something to sweat.

Keep the questions coming!