All Forum Posts by: Steven Gesis

Hi Samantha Stone ,
That's a low price unless your looking for D or war zone neighborhoods. I would reach out to James Wise as he is the Cleveland expert!

I'm looking to buy my first rental house, from a turnkey provider since I'm a beginner and out of state. Turnkey providers have prices listed for each property, is it common practice to make an offer below the asking price (and then negotiate counter offers), like I might normally do with an MLS listing? It that normal/acceptable? Or is that not part of the Turnkey culture? Thanks all

I'll put in my 2¢ regarding customer service. I travel often for my W-2 job and if it leads to an area requiring more investigation on my part regarding TK, I try to visit the operation and view some properties.

I've had one hell of a time lining up visits for a recent trip to MO. I had considered putting out a blast but found someone on short notice that squelched my anger a bit. PM for details.

For those TK providers, please look at your approach to customer service at every level.

Hello everyone!  I'm a long time reader, first time poster.  :)    The wife and I finally paid off our primary home and are ready to buy our first rental property. We've been looking in the Atlanta, GA and Birmingham, AL markets for turnkey opportunities. We've identified a few of Turnkey companies that looked legitimate and where properties looked promising: www.maverickinvestorgroup.com and www.noradarealestate.com in Atlanta and www.spartaninvest.com in Birmingham.  We were disappointed we could only find three that didn't look like scams, but I'm guessing that's mostly because we are new to turnkey real estate investing and that there are probably quite a few additional quality turnkey companies out there. 

We were hoping some of you experienced folks on these forums wouldn't mind sharing your knowledge.  We were curious...

1) Have you had any positive or negative experiences with any of the TurnKey companies listed above?  Are you aware of other reputable turnkeys in either market?

2) Are Atlanta, GA and Birmingham, AL good places for newbie turnkey real estate investors to start?

Thank you very much for your help!

Jay & Sara

@Steven Gesis thanks for posting that guide! I've seen your posts quite a bit and appreciate the advice you offer. Smartland is actually on my list of companies to call for going the turnkey route. I already know that buy and hold is what I'm going to do...1. because I really like this strategy and 2. because it's one of the only ways I can with my full-time job (which I happen to really enjoy). 

One of the common themes I am seeing with the turnkey nay-sayers is that the turnkey companies don't take into account the longer term capital expenses in their numbers. It seems like once you crunch the numbers on most deals offered by turnkey companies you are left with around 200-300 cash flow without any cap-ex factored in and only estimating 5% for vacancy and 5% for maintenance and repairs. This, of course, assumes the projected rents are accurate. It seems like a very small buffer on a lot of the deals I've briefly looked at. What are your thoughts on this? I completely understand that each individual absolutely must do due diligence on the team they work with, the PM's, the market, the neighborhood, the property etc. and ultimately decide if they are comfortable with the deal/numbers.  

I'm a Rookie but I train a lot on understanding the craft of real estate. I recently graduated from THE Ohio State University (O-H!!!!!) but now I reside in the Cleveland area. I want to connect with some local real estate investors in the Cleveland area as well as Columbus as I know quite a few contacts from school. I also would not mind meeting a couple of other agents to network with, whole sellers, lenders....the works. Need to get me a list of Go-getters and Hustlers together and Let's GO GET THE JOB DONE!!! I have no problem with making mistakes and failing, that is the best way to learn

Wayne Brooks- I am not trying to talk myself into over paying.  I come from stock market investing where hard and fast rules are the norm.  My question was more along the lines of why the big ticket stuff isn't taken into account during an appraisal.  I would think that they would be of less value to a homeowner than an investor, but for the gap to be so large between a newly renovated property and one that needs significant capex (and isn't marketed to investors) to be so large is a bit of a head scratcher.  

Perhaps I've spent too much time analyzing multi-family properties.........

Steve-I totally agree about spreading risk; my wife and I are looking at investing in multiple cities across the country for that exact reason.  We have been searching for properties that fit our criteria and it's no skin off my back to walk away from something that doesn't fit.  I'm just surprised that since turnkey is becoming more mainstream (or has been for a while) that complete renovations seem like a waste.

Hey @Corinthus Wilson! 203kcontractors.com has a database of "203k certified" contractors.  This doesn't mean they're good, but it's a good place to start.  Be sure to vet them (how many 203ks they've done, customer references, etc.).  My local lender has had success working with contractors provided by this site.  

I also agree with @Wayne Brooks.  Assuming your lender has experience with 203ks, they should be able to provide recommendations of contractors they've successfully worked with...nothing beats a good referral from someone with a vested interest in your success.

Another option is to hit your local REIA Rehabbing subgroup for a solid referral, but that will probably take time you don't have given that you are midway through the process.

Best of luck!!

-Mat

I have been looking at turnkey investment companies lately for out of state investing.  One of the common themes is that there may be a discrepancy between the asking price and the appraised value(possibly higher)  Sometimes, this may push a 20% down payment into a 30-40% down payment because a bank will only lend 80% of the appraised value.  

My question is:

If a turnkey company actually spends a significant amount of money to replace the high ticket items, e.g. AC, furnace, roof, water heater, etc., why wouldn't an appraiser be able to account for that when using comparable sales that haven't had significant capex items done? A house built in 1980 with brand new EVERYTHING should be worth more than the same house with original mechanicals.

If big ticket items are essentially brand new, why shouldn't it be accounted for during the appraisal?

I understand the difference here between SFR and apartments, but still, a higher down payment in these cases may mean the difference between buying 1 SFR and 2.