All Forum Posts by: Sam Sala

Too many crazy things, but still have the property and just raised rents $100 per side. Even with all the headaches, I think it will do fine and it was a great learning lesson 

I would really like to do what I repeatedly hear on the BP podcasts and BRRR - I really would. I am not afraid of putting in the work and due diligence in vetting people out. I worked very hard to build my practice to where it is today. As it is, I think it would be better for me to vet out TK providers and acknowledge that the return is simply not going to be what it could be if I would build the team up from scratch.

What I always hear is you need to have a team you can trust and that makes perfect sense, but trust is earned and how do I give all the different players I need to put together the opportunity to demonstrate that trust?  I think that's what it comes down to busy professionals who are buying out of state and why they go the TK route.

I agree completely. I have talked with the Property Management company that Martel company recommended and I trust their screening process so that will keep the turnover to a low. 

An update, my experience with Norada went very well, it has been a few years owing Memphis properties.  The one big thing I learned which you do not get on any tour, or see on any bus visit, is the back end property management team, their software, thier processes to collect rent, deal with late tenants, and now evictions.  2020 was a strange year for all, all four of my Memphis properties went from positive cash for to negative most of the year.  Some have caught up, but I have one rental that did not pay the $1400 rent for 7 months, went bankrupt because of covid, and they are working it out, but the 7-8K loss might not be seen in cash anytime soon.

I have no issue with the turnkey process, the buy, renovate, and flip to me at retail price, but as other have said over and over, the cash flow, which is why we get into this is greatly effected by the boots on the ground.  The Property Management team can make or break a long term investment if not done right.  PM is a thankless business, and is the main reason I went from self managed to turnkey to begin with.

What would I do differently, is be more involved in lease verification, 3x income, background check verification, credit score verification, I use to hand pick my tenants, which sometimes ended up in one month extra vacancy as I vetted, but at least if something went wrong I could only blame myself.  For upcoming lease renewals I want to be more involved, especially since Covid has driven different behavior, some tenants took big advantage of local authorities announcing no evictions, some did not.

I have experience with this group. 

Strong Points: Coordination. They do have a smooth process down and are in several markets. 

Downside: All of my properties are performing under 9% cash on cash ROI.... This backs out vacancy. If you factor vacancy allowance I'm barely hitting 7% ROIs. They mark up their properties way too high. Their investment advisors are a bit sneaky too as I had a bad experience in Huntsville. Marco is polished but it is becoming more clear they are simply trying to squeeze every last penny out of a deal. I am not having a hard time selling these underperforming properties as I need to hold them for 3+ years to make up for the closing costs. Overall I wish I hadn't invested with them.