All Forum Posts by: Rob Hakes

I just started using ClydeJones CPA coming as a recommendation from my RE attorney. He seems to be real estate savvy. I only have a few properties so my returns are basic. He apparently has lots of RE clients with big portfolios. I don’t know if he gets really into the weeds with cost segregation analysis and some of the more complicated things. I have been impressed with the customer service and reasonable cost.  

@Aman Sidhu I just recently bought a few from Spartan.  Nothing but good to say.  I would also recommend jumping on the ALAREIA podcast.  The host Brian Trippe has been an investor in the area for quite a while and hosts a lot of guest with boots on the ground.  As an out of state investor this has been helpful to get some insights from 3rd party sources.  There have been some decent PM's that he interviewed as well as other providers.  

@Amanda K. I just posted about my experience with them in the post titled 'Another Spartan Invest Turnkey Case Study'.  Check that out if you have a minute.  I share all the numbers and my experience.  Let me know if you have any questions.

I currently have my second property underway with them.

Chris,

I have wondered the same thing with properties in Utah.  I imagine that these properties are still being bought at these low cap rates because:

- People need to put their cash somewhere, and a 4.5 cap is better than a bank account. I also think that the inflation we have seen is pushing this more.

- For those investors that have had property for a while are sitting on a lot of equity and are using 1031 exchanges or cash out refi's/Helocs  to expand their portfolios and increase their cashflow position

Other than these two situations i cant imagine an investor getting themselves into one of these sub 5 cap properties with so many other opportunities to find a better return (out of state, other asset class) unless they are only banking on good appreciation.

Your question, which is the question of the year, is will the increased velocity, and volume of money (inflation) now in the hands of the people keep pushing rents and prices higher?  In some states I think things will probably start to soften, but with all of the population growth and housing shortage in Salt Lake metro, the demand will continue to grow.  It is super hard to say.  I am no expert, nor do i have years of experience.  Just my thoughts based on things I've heard.

I don't see the prices in Salt Lake metro dipping too much unless there is some catastrophic blow to the national economy.

I personally have put my capital on out of state deals that cashflow well, but don't show much promise on appreciation.  I may be kicking myself if things tank and i don't have liquid capital to get some really good deals.

Good questions.  I don't think anybody really knows.

@Johnson Lo I agree with most statements above.  I just started on some turnkey properties and definitely have found it helpful to have the spreadsheet as the primary tracking system and just enter the info from the PM into that.  Thus far, there are plenty of transactions that would not show up on my PM's system ie legal, accounting, mortgage, and a few other miscellaneous.

I found a good spreadsheet on the bigger pockets documents section.

Also talk to your accountant and see what is easiest for them come tax time.

@Jaye Seay I did use one of their lenders.  Graham Parham w/ Highlands Residential Mortgage.  They were very professional, helpful, and quick.  They understand the process with the turnkey's very well

I didn't too much rate shopping so i cant speak too much on how competitive they are.  I have heard that Ridge Lending is also good, but a bit more expensive because they are licences in all 50 states.

Interest rate with Highlands when i purchased was about 5% if I did 25% down and about 5.3% if i did 20%.  I elected to go 20%.  Also note that my credit score was over 800 so i imagine i got the best rate they could give.

I think i could have been more diligent in rate shopping, but with how smooth they made the process, and how tight i was with time, I went with them.

I will probably use them again.

Yes Utah is the MLM hub of the United States, and has a ton of scary real estate investing guru programs.  I think it is safe to say you should NOT be buying from a Utah based turnkey company because Utah is not a good turnkey market.  I think as a rule, if you can get your turnkey properties directly from the company that is based in the market you are buying in it makes more sense all around.

There are plenty of good Utah based real estate companies, but I am wary of any that would be trying to broker an out of state deal. IMO

@Eric Gardiner and @Tom Gimer

Interesting.  As with any business, if you lack customer service it isn't going to last long.  

I am not too familiar with the real estate agent realm, but found this particular post interesting.

Out of curiosity, if I wanted to sell my home for $400,000 and found a buyer could I just go to a real estate law firm/or title company and pay them to take care of all the paperwork and legal or would i need an agent for that? I know I may need to pay an agent upwards of $24,000.  Im sure i could get a good attorney that understood the paperwork and closing process for a fraction of that.

When somebody is selling FSBO, are they doing all the paperwork themselves or are they hiring an attorney and skipping the agent?

just curious

i have never sold any of my properties so i have never had to worry about it.

We have seen a 'real estate agent replacement' model here in Utah for the past few years.  Homie.com basically is a listing service that the seller pays a flat fee to list their home on.  It is about $1500 and includes the necessary closing paperwork as well as additional assistance.  The buyer does not pay any fee or commissions.  From what I see it has been really successful and they are growing into other markets.

I would imagine it is a handful of attorneys that can see that they will still make a fair amount doing a flat rate on helping with the transaction, and undercut the commission seeking realtor.  

Curious if there are similar models in other markets.

I agree with @Chuck Van Court

I recently purchased some of these turnkey properties.  Exit strategy is limited for several years.  If i wanted to sell tomorrow i would loose quite a bit due to sales commissions and closing costs, and that is in the event that i sold it for what I paid.  These markets definitely have influence from investor money so there are some risks and limitations.

I think without a big move and some 3-6% appreciation, i will be 3-5 years in equity paydown to be able to sell without capital loss, and maybe 10-20 years to have enough equity to start thinking using equity to make a decent 1031 or HELOC move.

Not ideal, but at least i understand what i am in to......