All Forum Posts by: Jeff Schechter

@Matthew Campbell  Again, we're sorry this happened.  We were the Seller of the properties.  Although we aligned with them at the time, we were NOT the property managers.  You knew this going in.  

We recognized that there were a lot of problems with the PM piece...yes, we were affected too (with our personal properties).  Thankfully, we ended that relationship very quickly.  We took a lot of money out of our own pockets to do the best we could to make you whole....for a situation that we did not create, nor were we contractually obligated.  This was in addition to fulfilling ALL warranty obligations.  Your accusations are being directed at us (the sellers), but they should be directed at the Property Managers at the time.

All this said, we have everything corrected... we are aligned with an excellent PM group, and are able to see that you currently have 7 out of 8 properties RENTED and paying on time.  This did not happen by chance.  There was a TON of work put in on your behalf by our team (the original sellers only), at no additional cost to you, to facilitate this transition.  Further, the rented properties are in excellent condition. Yes, you had some aggravation getting to this point, but there are many investors that would love to be in your current situation.  

Of course, not just as sellers, but as fellow investors, we are thrilled to see your portfolio stabilized and performing.  We wish you all the best in your future endeavors. 

Hey @Matthew Campbell - As Co-founder of HRRE, I just want to set the record straight.  You were referred to us by another investor.  That doesn't happen by chance.  It happens because other investors are happy with their experience with us.  

As a Turnkey company, we have an exemplary record.  You did indeed buy some properties that were inspected, and others where you waived inspection contractually.  We did indeed honor ALL roof-to-foundation warranties, on ALL of your properties...FOR AN ENTIRE YEAR.  We recognized that we were aligned with a PM team that was not up to par, and even took thousands of dollars out of our pocket to make you whole for issues that occurred.  This was above and beyond our contractual agreement.  When we had finally vetted and tested our new PM team, we then moved you over to our current PM, and helped with that transition.  We even helped financially with that transition.  

We also tolerated literally hundreds of emails and voicemails, berating us and our team members...usually written in the middle of the night.  We'd show up at the office, ready to tackle our day and our inboxes would be flooded with your vitriol.   These communications were written (or voiced) in such derogatory and disrespectful ways...we have never experienced this with any other investor, nor do we ever hope to again.  This had a very negative impact on our overall team's morale.

On our phone calls with you (which we had to initiate), you were very cordial, and you turned down any offers for us to sell off properties for you. To be clear, these were not "pennies on the dollar offers" to buy back your properties.  We were strategizing on how we could help you liquidate your properties through our network.  Is it possible that you decided against this because your portfolio is now 100% occupied and performing?  You somehow failed to leave that part out of the story.

We agree that your initial experience was not what we would have liked it to be.  But, we went above and beyond the call of duty to make things right.  To paint the picture as you have in a forum like this is not just one-sided, it's slanderous.  Had you been with sellers who didn't care, this would indeed have turned into the thousands of dollars of losses that you spoke of.  My business partner and myself would love to get back the many thousands of dollars we took out of our own pockets to make you whole.

Overall, we are grateful that things worked out for you.... that you have a solid portfolio, with great tenants that pay on time, and a very professional property management team - with a fantastic online portal that gives you full detail and analysis of all of your transactions.  What you are holding is the envy of many an investor.

We wish you all the best in your future ventures.

I am not defending Mainstay but they do have a fairly decent reputation in our area. We run a Turnkey operation, and see this stuff all the time. Communication from afar, especially when there are other parties involved is difficult. We've sold many a finished property (fully rehabbed, fully inspected, fully tenanted, no trailing meter issues, etc) for FAR LESS than what OOS investors think they can do from a distance. If you don't have the volume of buying power, the in-house crews, the years of experience and relationships, it's going to be hard to do a BRRRR long distance. Yes, there are great e-books out there on how to do this, and the instructions for team-building make sense, but there's a lot of dead bodies out there. It's like telling a stranger how you want them to raise your baby... from 7 states away. There's a LOT that gets lost in translation.

We run a successful Turnkey company in Indianapolis.  We're almost predominantly C-class, and have had very few issues.  Properties are renting up easily and quickly (with self-showing technology).  The only issue we are having is with one of our B-class tenants who lost her job.  Like mentioned above, this is likely due to government programs, unemployment benefits, etc.

@Nicholas DeFelice  We're a successful turnkey company in Indianapolis.  We've sold hundreds of properties here.  I can't think of one instance where the buyer was represented by an agent.  We'd have no problem with it, but we just don't see it.  This is likely due to a couple of things...

1.  We give the investor a very thorough folder to review.  It does NOT replace due diligence, but the investor knows EXACTLY what they're getting...property condition, contractual obligations, property class, current performance, etc.

2.  Notwithstanding @Brad Bellstedt comments, realtors don't work for free.  I agree they provide value, and may work for a very small fee, but as investors we're all looking for ways to stretch our dollars, not add costs to the equation.

@Anthony Liguori  The places you mentioned are merely marketplaces (with some tools to help due diligence) where buyers and sellers of properties can connect.  There are turnkey properties on those platforms, but there are fees involved.  Depending on the market and price point, there can be some deals there.

We're a TK provider in Indy, and find that it's often times not worth it for us to list our properties on these kinds of platforms, because of said fees...it's either not a good deal for us, or the buyer, or both.

Thx to @Ali Boone for piping in.  Yes, there are a lot of other advantages to owning rental properties that were not considered...most notably depreciation.

As an owner of a successful Turnkey company, I can tell you that if we charged 20% markup, we'd never survive.  Our prices would be too high in relation to rent.  A good turnkey does two things for you... gets you into a solid property for a reasonable price, and has a fantastic property management solution.  

For the people saying it's so great being on the selling side of this equation, I can tell you... this is a VERY difficult business.  We take on all the risk of acquisition, have to absorb rehab surprises, have to find the right tenant, have to provide total transparency in terms of inspections, etc.  Then (while incurring more hold costs each day), have to wait for the investor to make a decision...while they pick everything apart, including the integrity of 3rd party licensed inspectors.  We spent YEARS developing our teams and processes, and investors don't really get how much we do to protect them.  This mistrust has become more prevalent over the last couple of years, partially because of a few bad players, but mostly because of well-meaning members of forums like this who tend to bash Turnkeys.

If you had a bad experience at a restaurant, would you stop eating out?  And would you tell all your fellow eaters to never go out to a restaurant?  This is what's happening in our industry.  I apologize for the rant... just wanted to set the record straight.

Good luck out there.

We're a successful Turnkey company in Indianapolis. Likely because of COVID, we have investors would rather hold the mortgage on a property, than own the property themselves. This obviously insulates them from CapEx, volatility of the rental pool, etc.

We're considering offering this on an individual basis to our investors - strictly for properties that we are keeping for our own portfolio. Likely to be around 7% returns (20 yr amortization or interest only), with provable 65% LTV.

Just curious...Is this a good idea?  Are there benefits and/or pitfalls?  As an investor, is this something you'd be interested in?  Why or why not?

There's a wholesaler on every corner in Indy.  All of the "education networks" target Indy for their seminars, and it seems like there are another 50 or so every time another one rolls through town.  I bought a house for my personal residence from another investor... 3 years ago.  I'm still getting phone calls and post cards asking me if I want to sell it.  I have no idea how I got tagged as a distressed seller, but I can tell I'm on at least 10 wholesaler's marketing lists.  This is AFTER asking them to remove me.  The wholesaling market is highly competitive here, and there is a lot of daisy-chaining.

Talk to Brett Simple Wholesaling.  He does training for new wholesalers and partners on deals with them.  Essentially, you're starting out as a bird-dog for their company, but they know how to do it right.

I have heard that High Return Real Estate is amazing.  :)