All Forum Posts by: Mark S.

@Annie R., I am a high earning W-2 employee myself. I can barely change a lightbulb and have zero aspirations to DIY real estate. Life is too short for property management. I am all about being as passive as reasonably possible. Personally, I do a combination of real estate note funds, syndications (mostly multifamily, but looking to possibly expand into self storage or mobile home parks), and turnkey single family rentals. They all have pros/cons. I should also say that I am heavily invested in the stock market and will continue to do it all over time. My net worth is significantly higher than the threshold that Lane mentioned above, however, I am still a huge fan of turnkey rentals - especially with long term, 30-year fixed mortgages. He seemed to have a bad experience with turnkeys and evictions, etc. Although nothing is perfect and there will always be bumps in the road, my turnkey experience so far has been overwhelmingly positive. High level plan is real estate investing for early financial freedom and traditional market-based investments for phase two of retirement at a more "normal" retirement age (and also as a backup plan if my REI happens to blow up in my face). Hope that helps.

@Kelly McClellan, I had a call with them years ago.  They seemed okay but also seemed very much focused on cash buyers only (first red flag).  They had a 4-plex come online and I asked if they would accept financing on it and they said they would.  After further research, I decided to pass on it.  I would occasionally get emails from them and it was difficult to get a response back when I’d reply, so I just decided to move on.  Over the years as they’ve apparently grown bigger, they seem to project a “better than thou” image with a chip on their shoulder and that doesn’t sit well with me.  Not too long ago, in an effort to clean up their email list, asked if I wanted to be removed and then tried to refer me to another turnkey group in Ohio (that I had already connected with and visited) to pick up a quick referral fee.  I called them out on it and never heard from them again (and hope I never do).  What a waste of my time.  

@Brandon Kamaka, different strokes for different folks, but you could absolutely get a PM for 4 units.  I have a PM for my 5 SFRs (actually two PMs - one manages one; the other manages four).  My time is too important to me to manage my own properties.  I realize I pay handsomely for that, but I have a great team and as others have said, “life is too short for property management.”  I let them do what they do well, factor it into my underwriting, and enjoy my free time and sanity.  :-)

@Mark Koster, great write up.  I’m in a similar situation and also invest in both.  I don’t really have much to add at the moment, but am interested to hear others’ thoughts and will be following this thread.  Perhaps I’ll be able to jump in later with more meaningful feedback.  I guess the only thing that comes to mind at the moment is the benefits of the long-term, fixed interest rate debt on the turnkey rentals that can be locked in at today’s low rates.  As others have said, “the deal is in the debt.”  I think this needs to be included in the overall return profile of the turnkey route.  Yes, syndications also generally use leverage, but as you mentioned, the exit is fairly short term.  These 30-year loans on turnkey rentals will probably look REALLY good going forward based on where things are today and where they could be heading (inflation, rising rates, etc.).  

lol.  

I think it highlights the fact that SD-IRAs are not worth the hassle to invest in real estate with leverage. 

I think he’s asking about whether or not they can demand full payment and accelerate the loan, almost like a due on sale clause, because his W-2 income is gone. I think that might be what’s stopping him from going to the lender for a refi.  My strong guess would be no,they can’t call the loan and that yes, they can likely do a refi using both rental income and if nothing else maybe an asset based loan (using your 401(k), etc.) but double check your loan documents and speak to a qualified loan officer.  

@David Hutson, are you talking about Jeremy?

@David Hutson, I’m surprised MSHB isn’t also still doing their short-lived “investor exchange” program, where they facilitated the sale of their homes between investors.  It seems like this program lasted somewhere between a few weeks and a few months.  I bought my second rental through that program back in early 2018 for $74,480.  It rented for $850 at the time.  It now rents for $875/month, but the tenant in there has been there ever since.  I might be able to bump rents a bit, but she pays early/on time; she’ll have been there 3 years coming up in the spring and I’d like to keep her.  Plus, and maybe I’m wrong here, but wouldn’t want to do that to an existing tenant during COVID.  

My third rental with them I bought for $84,000 in late 2018 and it rented for $885 at the time.  We bumped it to $905 a year later.  Then tenant recently moved out after about two years and they had it released in 5 days for $995.  This one is in 38118.  Rental market there is definitely strong. 

@Michael Cox, to @David Nutakor’s point, I would make sure the provider has a 1-year (or similar) warranty.  One of the providers I work with has a 1-year warranty.  Of the 4 turnkeys I have with them, I think only once did a property need something in the first year.  The one other “provider” I used for 1 property did NOT have a warranty (or at least, I wasn’t aware of it until well after the fact when they called me up to try to sell me another property and asked how the first one was going - and I had $1,100 in HVAC repair bills in 9 months - and they ultimately did NOTHING for me).  That other provider also outsourced (at the time, not anymore) the PM function.  In short, I would recommend a provider that offers both a warranty AND does in-house property management.  If not, NEXT!