F.A.Q.
Frequently Asked Questions
1. I see similar properties for significantly less than the properties you have when I go on Zillow.com or Realtor.com. Why is that?
Not all properties on Zillow or Realtor.com are fixed up and hardened for rental purposes. They’re not rehabbed with quality products. There is a big difference between price and cost. For example, you can buy a Camry, which cost a little more than a Ford Taurus initially. However, the Camry will cost less over time in maintenance and it’s worth so much more when you go to trade it in. So actually, the Camry cost is less.
The costs of our properties are less over time because they are fixed up, they have a warranty, and they’re hardened for rental purposes. You don’t have as many things to fix as if you would have bought one of these cheaper properties and had to fix it up yourself.
2. Should I be worried that the school ratings or the neighborhood rating isn’t good?
We don’t sell properties that are in a war zone. As a general rule, we also do not sell properties in neighborhoods where there are a lot of owner-occupied houses. The later returns are not as high. These are not the kind of the neighborhoods that you would want to live in.
Our properties grade anywhere from 1 to 5, sometimes averaging a 6 on Zillow. These are working-class neighborhoods with working-class people who typically do not buy. They usually are not college-educated, they don’t want to live in a war zone, but they do not want to buy their own house. Neighborhoods are 60 – 70% rented versus owner-occupied.
3. How do I know about the property when it is out of state and I can’t see it?
We have an inspector. We also suggest you hire your own inspector to look at the property when it is done being rehabbed. If anything should be found wrong with it, the vendors of the property will pay for the inspector to come back and re-inspect those items that were found until they are fixed. There will also be an appraisal from the bank. The appraisal will come in at or near what the property is being sold for which will confirm what the property is worth.
4. How do I know the property manager is good if they are out of state?
We have vetted our turnkey managers. They have been in business for at least 10 years. They have hundreds of properties under management. The tenants will not know who you are. Everything is done for you: All the repairs, the evictions, tenant screening, late night phone calls, etc., all of that is done for you.
5. What can I do if don’t have any money or I do not want to use the money I have for a down payment?
You can borrow money from your home equity line. You can also borrow from your 401(k). With your 401(k) you would direct the money that you were normally putting monthly into your retirement account to now be directed to pay off the money you borrowed. Once you pay off the initial loan you can the money out again and buy more properties. Now your money will go towards your rental property portfolio and you will also be receiving a monthly cash flow without having to wait until you retire. Something you do not get from your retirement account.
6. Why doesn’t everyone do it?
There is a barrier to entry. Most people do not know what to do and how to start. They do not know a good property manager they can trust. They do not know if it is a good investment or bad investment. They do not know where to go.
DO YOU HAVE
A QUESTION
FOR US?
CONTACT US