All Forum Posts by: Zach Lemaster

@Dennis Dougherty thanks for the mention!

I'm excited to checkout your YT channel!

@Pinny T.

Thank you for the interest in Rent To Retirement.  We have many reviews and threads on BP for over a decade now that I've linked below.  This will be helpful in your research.

Rent To Retirement actually has more 5 star reviews than any other company on Bigger Pockets, so I recommend doing your own research from people that have actually invested with us and understand how our process works.  Here is the link to our BP page showing over 250 - 5 star reviews: 

https://www.biggerpockets.com/co/RentToRetirement

To answer your question, there are many reasons to consider one market over the other.  Among the top reasons, I would recommend understanding what different price points look like in different areas along with taxes, legislation, population/economic growth, affordability & rental demand.  Some markets have lower price points that allow for more cash flow, while other markets likely have better appreciation, but upfront have higher price points & possibly lower cash flow.  All depends what matches your goals the best to get started.  

I'm happy to answer any additional questions you have at any point in time.  Just let me know.

Here are some other threads to read about Rent To Retirement, Turnkey investing, different markets, etc.  Hope this helps.

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/1116050-a-huge-win-with-cori-from-rent-to-retirement

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?

https://www.biggerpockets.com/forums/92/topics/1162779-rent-to-retirement-academy-experience?highlight_post=6630770&page=1highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/forums/12/topics/1122318-quality-turnkey-companies?highlight_post=6413855&page=1

https://www.biggerpockets.com/co/RentToRetirement

https://www.biggerpockets.com/forums/92/topics/929410-rent-to-retirement-updates?highlight_post=5508807&page=1#p5508807

https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

https://www.biggerpockets.com/forums/311/topics/915728-experience-with-rent-to-retirement-turnkey?page=1#p5345200

https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster?

@Jon Dawes 

All of us at Rent To Retirement are looking forward to working with you and helping you find the right lending option that best suites your needs. We appreciate the shout out! I'm sure some folks on BP will provide their top DSCR recommended lender (along with many lenders themselves commenting). We will be sure to share the list of lenders we have as well that can help you accomplish your goals based on the lower down payment you are looking for. We do currently have some lenders that do all sorts of low down payment options to get you to as little as 0% down in some cases (with RTR subsidizing part of your down payment). All things we will discuss during our call.

@Diana Jing @Ruchit Patel We appreciate the detailed insight.  Thank you for contributing to share your experiences and candid feedback.

Thanks for sharing @Joseph Schweizer.  This looks like great feedback over the years!

@Jon Dawes

This is a great summary of your goals!  Thank you for sharing.

I think your idea of getting into a house hack is a great way to add to your portfolio with low down payment.  Of course, this is a personal decision as well to determine if that is the right living situation for your family.  That is exactly how I started building my portfolio is with a house hack on a duplex.  It was a huge advantage for me to start my investing career and get into the game!

To your question about the two different options, I think you could likely do both of your scenarios based on the capital amount you have. I'm happy to personally connect with you to discuss this further if you'd like to provide a lot more context around my opinion. It really depends on what your ultimate goals are in the short and long term. Ultimately it sounds like you looking to start and scale a portfolio over a relatively short period of time. If that is the case, then I highly recommend trying to stretch your capital across multiple deals vs putting more than the necessary amount into one deal just to cash flow more on that one deal. Owning more REI over time will allow you to build a more diversified portfolio and provide multiple streams of income. The more overall REI you own will allow appreciation across all homes to build equity faster than in say just one home. I do think you can create a net positive cash flow owning multiple properties and allow you to expedite the goals mentioned. Using leverage is such a powerful tool to scale your portfolio beyond what other investment options offer. That is the beauty of REI!

We certainly appreciate your interest in Rent To Retirement!

Just to clarify on some things you are considering, we currently have some excellent incentives on new construction properties that may be interesting to explore as you continue your research on what the best options are for you based on your goals.

Those incentive options include:

-An immediate price reduction of up to 5% of the home price to allow for immediate equity.

-Rate buy down to as low as 3.99% to dramatically increase cash flow.

-5% down payment credit where RTR pays 5% of your down payment allowing you to keep more of your funds for other investments and increase overall ROI.

-loan options that allow for as low as 0% to 5% on select properties that will also allow you to scale quicker owning more REI with the same amount of real estate.

Again, I am happy to discuss your goals and any of these creative options in more detail if you'd like just let me know.

I hope this was helpful!  Reach out any time.

-To your success!

The RTR team!

Here are some other posts that may be interesting to read as well as you continue your exploration!

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/1116050-a-huge-win-with-cori-from-rent-to-retirement

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?

https://www.biggerpockets.com/forums/92/topics/1162779-rent-to-retirement-academy-experience?highlight_post=6630770&page=1highlight_post=5677176&page=1#p5677176

https://www.biggerpockets.com/forums/12/topics/1122318-quality-turnkey-companies?highlight_post=6413855&page=1

https://www.biggerpockets.com/co/RentToRetirement

I think @Andrew Postell did a pretty good summary. A couple other points to mention would be that someone could purchase up to 5 investment properties with this loan structure if they qualify, and that this is only available for SFR, not MF properties.

It might help if I shared exactly how I personally used this portfolio loan to advance my investment goals.

This is one of many unique lending options available today that is good for investors to evaluate if it fits their goals.

So here is what I did:
After running the numbers of putting 25% down on one investment property, I chose to purchase 5 similar properties with the same 25% down. These were each new construction homes in the $300K range in growing markets (I'm using general numbers for illustration purposes). So instead of putting 25% down on one $300K new build, I purchased 5 homes with about the same money down (slightly higher due to additional closing costs). This means I purchased $1,500,000 worth of RE with 5% down on each. Two of these homes operate as LTRs where the cash flow is slightly negative or close to break even. Three of the homes I operate as STRs/MTRs where I actually achieve positive cash flow on those still due to the increased income on the STRs/MTRs as opposed to LTRs. Location is key to determine if STR is an option. Overall the portfolio is about break even or slightly positive depending on the month.

Here is the WHY behind how I was able to use this loan to my advantage.

1) I am not too concerned about immediate cash flow as I'm not looking to live off of the cash flow day one. I did not expect much cash flow at all with having a 95% loan on the properties. Being in growing areas, I know that rent will increase each year in addition to growing equity each year through appreciation and loan pay down.

2) Running the math just on appreciation of one home vs five allowed me to grow equity on a portfolio much quicker. For example, at a 4% appreciation rate, if I bought one home, I would have had $12,000 of appreciation after one year. By owning five properties worth $1.5M, on the same 4% appreciation, I would have $60,000 of appreciation after one year. After 10 years this would be a difference of $120K on one home vs $600K on five homes (not counting compound growth). This is a long term investment for me, so I am not concerned with short term, potential market fluctuations as all RE goes up over time. Use whatever appreciation numbers you want, but the concept remains the same. I only illustrated appreciation in this scenario, but the concept of exponential growth is the same by having multiple properties for things like cash flow, debt reduction, and most importantly for me, tax benefits.

3) I run cost segregation studies on all properties I buy to take accelerated depreciation to offset my income. This is most important to me as I earn high income and have a high tax liability. On average, I received a 30% bonus depreciation on my properties being new construction. So, on a $1.5M portfolio, I received a $450,000 tax deduction the year I bought the properties. This equates to over $200K actual tax savings that I would have otherwise paid in taxes. This means that I actually saved more in taxes than I used as a downpayment to buy the portfolio allowing my ROI to be through the roof (over 300% just on tax savings). So, this serves my goal to grow & diversify my portfolio while earning great tax benefits.

4) I am in a strong financial position where I could qualify to buy multiple and have adequate reserves to maintain the properties long term and cover any potential negative cash flow during the time I own them. I could have bought all these properties cash or used other financing options, but this made the most sense to me to expand my portfolio using debt as a tool to meet my goals. I always look for creative financing options to advance my investing goals.

Running the numbers over time is key to understanding what the long term outlook is for this strategy and if it makes sense for each investor.

I hope this sparks some ideas on how unique lending options like this may or may not fit your long term investing goals.

@Havan Surat you need to call them yourself to see if you qualify if this is something you are considering using for your investment portfolio. They only lend in a handful of states. These are portfolio that are underwritten and held in house. They are not conventional loans that many newer investors are used to using. They have successfully closed hundreds of loans for our clients. RTR is impartial on who your lender is to close deals. However, we do have a list of some of the top recommended lenders across the nation that offer any kind of loan you need to fit your goals. This include conventional, creative options like this 5% down option, DSCR, non-recourse, commercial, LOCs, HELOCs, installment loans, bridge loans, etc. Our goal is to put you in touch with the right lending team to accomplish your goals.

@Henry Lazerow happy to answer any questions you have.  There is strict qualification criteria, but we have seen hundreds of investors use this creative loan product to buy more real estate with the same amount of capital.

I'm here to assist however I can.

@Andrew Postell

I haven't found a credit union that offers the 5% down investor loan in Texas yet, so maybe that is why you are having difficulty finding one. We do close a significant amount of properties with credit unions that finance investors with this 5% loan product, mainly in FL & AL. The credit union that does the majority of those is all in credit union. It's a portfolio loan they underwrite and hold in house & have strict credit/DTI requirements (as they should) since they can leverage up to 95% on pure investment properties. For the right investor, this could be a strategic option to scale quicker and maximize tax benefits like we do.

I have worked with GR quite a bit in the past, especially with loan blocks for rate buy down.  That has mainly been with Richard Advani on your team.  Tell him I said hello!  ; )

Hope this helps.

@Nick Benedick Congrats! I'm right there with you! My daughter is 9 months & son is almost 3. I love REI, but not when it becomes another full time job that takes away from family time.

Check out our website link in my signature to set up an appointment with our team to learn about your investing goals, answer your questions & give you more information about how we work with investors.  After you have that initial call with our team, drop me a message so we can connect directly to make sure you have a clear vision on what the next steps are to accomplish your goals.

Regardless of how you ultimately decide to get started in REI, the first investment property is so essential to get under your belt mentally & emotionally. This will allow you to get into the investor mindset to be able to focus on how to scale & expand your business over time!

Appreciate you reaching out & we look forward to connecting with you Nick!