All Forum Posts by: Zach Lemaster

@Dylan H.

Probably more resources than you need, but I wanted to share some threads that already have extensive discussion on this topic.  This should at least give you a starting point of some perspectives & people to connect with.  Please let me know if you have any questions.

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

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

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

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

@Parker Thornburg

Here are some threads you can reference that have pretty extensive discussions.  Feel free to reach out with any questions.

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

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

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/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

@Hernando Quintero

Thanks for the mention!  Happy to answer any questions anyone has.

@Chad Kinsley

Thanks for the input Chad. I'd like to add a few notes to clarify points mentioned. We are here to support whatever makes sense for your investment criteria regardless of the location. We have new construction in many parts of the country along with rehabbed SFR & MF properties.

Just to be clear, this thread is about Ocala.  We are currently discussing a different market in SWFL (Cape Coral).  This is an exceptional market that is growing dramatically.  This is driving rents & market values up consistently throughout the year.  Just over one year we've seen an increase of market value of about 18% to 20%, and rents have increased faster than that.  If this trend continues over the next year (which it likely will) there will be a large amount of equity and cash flow beyond what we are seeing with today's analysis.  The nice part about investing in this location is the opportunity to have a brand new built house in an appreciating market that has high rental demand.  You will likely come into immediate equity while still having positive cash flow.  In most instances it is very hard to obtain positive cash flow on new construction.

Here are a few points I think would be worth considering in your evaluation to determine what the best path forward is.  It's important to know what numbers to input in your analysis.

-We run $2,395 on the pro forma for rent evaluation.  We have seen finished projects renting in this range very quickly.   I'm not sure where the $2,500 to $2,700 came from, but that would be too high for current market rent.  Maybe in the future if the market continues how it is.  As @Stetson Miller mentioned, going the STR route is a great way to achieve higher rents. Please evaluate your rental at the $2,395.

-With new construction there is always a 1-2 year comprehensive warranty along with many longer mechanical & structural warranties.  I do not think it would be correct to evaluate 5% for maintenance & 5% for cap ex with new construction.  Maybe if you are holding 15+ years, but then you also need to factor in rent increases, etc.  Leasing fee coming through our network should be 1/2 of what is mentioned, not full month's rent. 

-The pro forma shows a regular 30yr conventional loan as that is the only way to compare apples to apples for long term holds.  There are loan options that are realistic within these parameters.  This is not evaluating a construction loan upfront like you are doing & there are different construction loan options to choose between.  We need to evaluate each of these on a case by base basis with varying numbers.

-The CoC play is not dead. If the market continues as we have seen over this past year the rents will likely be higher. Also, please note we evaluate the taxes at over $3k in yr one. The reality is that with new construction your taxes should be a fraction of that cost the first year & will gradually increase to be fully accessed in yr 3 likely. That means in the first couple of years your cash flow should actually be ~$1k to 2k higher than projected due to the tax amount. If CoC play is not attractive on this, then maybe the equity position would be. On this 1774 model you are considering, we just had 5 appraisals that came back in the $400k to $405k range. It's a good to have options with homes to cash out refi, sell, vacation to & use as a STR, etc.

Not trying to oversell this too much.  It's not for everyone.  The building delays are real and the market could slow over time, but these do make a lot of sense right now any way you slice it up.

@Adam Wells

Welcome!  Here are some good posts to read through to answer your questions on RTR.  I'm happy to answer any questions you have at any point in time, and we look forward to connecting with you!

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

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

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

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

@Patrick Bavaro Thanks for the mention!

@Tammy Lewis We are active in AL along with other markets as well.  I'm happy to answer any questions you have.  Patrick & many other investors have been very successful investing in SWFL new construction as he mentioned.  It's all about finding the right fit for you and, of course, doing your research.  Here are a few threads about RTR if you are interested to learn more.

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

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

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

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

@John Douglas

Welcome!  There has been a lot of discussion already on this topic.  Let me assist by providing some links that might be useful to read through.  Feel free to reach out at any point with questions.

Threads to read through:

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

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

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

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

@Chase Cannon

Thanks for sharing your experience! I love the idea of using your SDIRA to invest in REI to take control of your investment options within a retirement vehicle. We look forward to working with you on many future properties as you scale your portfolio. Well done Sir!

@Shilpa Ga

We are happy to connect with you to discuss your goals, and to answer any questions you have.  

Please see the contact information in my signature to reach out to schedule a time.

We look forward to connecting with you.

Everyone on this thread please read this.  If you have lending questions, please reach out to your RTR rep to discuss the best options available for you.  Not everyone can qualify for the same financing options.  If you have construction or investing experience you likely will have better options available to you w/ less down than if you have minimal experience.  Also the state you live in has an influence on what financing is available.  For example, CA residents are restricted from joining local credit unions that offer some of these 10%-15% down options.  How you plan to use the home also has an influence on loan terms.  People that would build these for a primary residence or second home would have different options than pure investment property financing.  Your RTR rep will direct you to the best lending options based on your scenario so you are not spinning your wheels going down financing paths you would not qualify for.  That provides the most efficient and effective way to assist everyone that is interested in building with us in this location.  It would be important to know that if you are qualifying for a construction loan in for a property <$300k with ~$70k down (and you are not a builder yourself), that is exceptional construction financing made available to you!  If you don't have experience in the construction field, you would likely not qualify for most construction lenders, or they would want 50%+ down in many cases with unfavorable terms.  Hopefully this adds some clarity to what loan options are available.  Your RTR rep will be able to guide you down the right path based on what they know about your situation & goals for the property.