All Forum Posts by: Zach Lemaster

@Alex Longinidis

Thanks for the interest.  Of course we are happy to provide specific data with you.  It's always good practice to run your own numbers, but also know why you inputing the numbers you are.  There are numbers that are variable, and numbers that are not.  Things like rent, mngt, tax, insurance, etc. are fixed numbers are known.  Items like vacancy, future maintenance reserves, etc. can be variable along with your mortgage numbers depending on what financing you obtain.  Just wanted to add clarity on this.  Also, please keep in mind that if you are asking a local property manager or agent outside of our network, they very well could try to steer you away from route in effort to do business with them directly instead of RTR.  They would not be providing you with an unbiased answer.  I think it's important to point that out along with letting you know we have data to reinforce the numbers showcased like actual insurance quotes, leases, mngt contracts, etc.  Feel free to reach out at any point with any questions as we are happy to sort through this with you.

@Jaspreet Singh

There has been a significant amount of discussion about this topic in the forums for many years now.  I've posted some links below to forum threads with people discussing their experiences that will help answer your questions.  I also think it would be good to ask the other side of the argument of why would someone use this strategy, and positive experiences from investors if you are considering going this route. 

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

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

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

https://www.biggerpockets.com/forums/44/topics/1058814-first-time-with-new-construction-cape-coral-fl?highlight_post=6055029&page=1

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

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?highlight_post=5677176&page=1#p5677176

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/67/topics/952977-turnkey-in-indianapolis-through-rtr-case-study

https://www.biggerpockets.com/forums/12/topics/997350-lessons-learned-from-buying-my-first-rental-property?highlight_post=5748036&page=1#p5748036

https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey

https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach

https://www.biggerpockets.com/forums/48/topics/874096-reviews-on-r2r-and-nch?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5123754

https://www.biggerpockets.com/forums/311/topics/883772-turnkey-investing-renttoretirement-feedback-reviews?highlight_post=5171720&page=1#p5171720

https://www.biggerpockets.com/forums/92/topics/950188-rent-to-retirement?page=1&utm_source=Iterable&utm_medium=email&utm_campaign=Transactional:%20topic_notification&utm_content=Transactional#p5535505

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

@Don M. Congrats on the permit being approved!  Thanks for the update.

@Bernard Joseph S. I appreciate the kind words!  We are always here to assist in answering as many questions as you have & to work through any issues that come up along the way.  That is our commitment to our investors.  We do our best to build long term relationships with clients.

@Don M.

Outstanding summary Sir!  I agree with everything you said 100% & I appreciate the positive feedback.  We still have some time in front of us until the build is completed of course, but I agree that you are in a good position.  Most importantly, I'm sure you would agree, this has been a huge learning experience that will allow you to be a more successful & savvy investor in the future based on this experience.  That is the true value of participating in things like this that are a bit more involved.  Most people have zero knowledge or experience when it comes to building.  This is a very valuable skillset to have in your arsenal as an investor that can dramatically increase your net worth in a short period of time if the strategy is applied correctly.  I do believe your land has gone up significantly in value as well correct?  Most decent lots are selling in the $50k to $60k range.  We now have some other locations in FL & other markets that have much quicker timelines for completion (~90 to 120 days) & still have some equity.  Please continue to keep us in the loop on progress updates from the city & builder so we can track with you.  Feel free to reach out at any point whenever you are ready to look your next investment, or to discuss this construction project. 

@Don M.

Thanks for sharing the details of your project!  Please keep us all updated with progress.  All normal emotions for going through the tedious construction process.  I'm right there with you.  Hopefully things continue to progress, and you come out on top with a huge equity position/high cash flow when it's all completed.  We are seeing about 50/50 split of people holding as rentals vs selling.  The avg equity position upon completion is about $150K with avg rent of $2,500 leasing in 3 weeks or less post CO.  Hopefully this gives you some light at the end of the tunnel.  Feel free to reach out at any point with any questions, or just to get a sense of how the market is doing overall.

@Chris Harper

Extremely useful insight you provided from someone doing multiple builds in the area!  I agree with everything you said!

@Michelle Moe

I am more than happy to discuss any questions you have on this, and specifically run through some scenarios with you if you'd like. Just let me know. Very much a personal decision, but there are benefits to involving a lender as Chris very nicely outlined. For me, I like to always look at the best & most optimal use of my capital. While we could pay cash for our own builds, we decided to leverage them to ultimately do more builds providing an overall greater ROI & equity position across multiple doors using financing instead of cash. Interest is only paid on funds drawn at each draw which reduces the amount of interest paid during the build. While the interest rate is higher for construction loans, you would not be paying that amount on the full amount of the loan. Interest is applied on the amount of capital taken out on draws to date each month. Annualized the interest rate is probably less than 5% considering how the draw process works. I would plan for a total build time of 16-18 months if you are including permitting in that timeline even though there are no draws during that period. Feel free to reach out with any specific questions!

@Kit Elliott

I think there is some definite opportunity in Omaha, but this is not a market we've explored in great detail. Really, I can't a find any market that beats the overall cash flow, immediate equity & appreciation I see in many parts of FL. Especially with new construction. All of our projects in the $300k range for new build SFRs rent out at >$2,500 allowing for double digit ROI and have $50k to $150k of immediate equity we either sell for a gain or cash out refi to be net zero into the deal. This would be like a BRRR for new construction (build, rent, refinance, redo....retire)!

@Vidal Gonzales

It's all about choosing the right location that meets your goals & working with the right team!  We live in Denver, but invest all across the country in areas that cash flow better, have lower price points to purchase & still have strong appreciation!  My recommendations to look at KC, Indy, OH, FL.

@Aviv Peretz

I definitely recommend speaking to an attorney and CPA on this. Disclaimer: I am not either a CPA or Attorney. Generally active income has tax advantages to run through an S Corp, or LLC with an S corp selection. It's highly advised not to own or purchase property that you plan on holding in an S Corp. If it's a flip that would be a different story.

The owner of the property is the one to take out the HELOC. You would need a separate agreement with them to be a private lender to you regardless of where the capital comes from. I recommending hiring an attorney to draft these documents and secure the investment by the REI deal you are working on.