Prior to going into any new market, we spend an extensive amount of time on research. On average it can take anywhere from 3 to 6 months of research before opening up a new market on our site. We look for markets that are stable, yet offer a positive outlook in future job growth, population growth, strong rental market and other factors which we can go over with you. We‘ll have one of our experienced staff member fly out to the market and evaluate the neighborhood(s), surrounding area(s) and also interview the people we will be working with that will assist in making sure your investment(s) run smoothly as possible. One of the most important factor going into any new market is our vetting process of putting the right team in place to make sure our clients’ investment is well taken care of after it closes.
FAQ
There are so many markets in the U.S. How do you determine which one to go into?
How would I know the condition of the property?
Prior to closing the transaction, the property goes through a rehab process to make any necessary repairs or replacements. The goal is to have the home move in ready condition for the future tenant(s). After the rehab work is completed, we suggest hiring a professional home inspector to inspect the property. The home inspection report will show you the condition of the property along with any repairs that are outstanding or possible major concerns. If there are any concerns brought up on the home inspection report, our team in each market will work directly with you to address each one.
How would I know that I’m not overpaying for the property?
If you’re planning to finance the home with a lender, they will require an appraisal report be completed by a licensed appraiser. The appraisal report will show the current market value. If for some reason the appraisal report shows the home being sold at a higher than market value price, then you can decide to either cancel or often times negotiate with the seller to reduce the sales price. From our past experiences, 99% or more of the time, the homes sold to our clients are purchased below or at market value. It’s all case by case basis. If you’re planning to purchase the property All Cash, you can still hire your own appraiser to provide a valuation on the home..
Do I need to pay All Cash?
Absolutely not. Most of our investors use financing.
Do you have a good lender?
We do have a lender we can recommend that offers financing Nationwide. You are more than welcome to use a lender of your choice as well. When choosing a lender we suggest working with one that has experience in these types of investment loans.
How many investment properties can I finance on my credit?
Generally you should be able to finance up to 10 single family (1-4 units) investment properties on one person’s credit. It really all depends on your debt-to-income ratio and other factors that contribute to qualifying. We recommend you consult with a loan specialist which we can refer you to one.
What are the average returns on the investment properties you offer?
Typically our investors have been seeing returns of 10% – 15% ROI. This will vary by markets, neighborhoods, type of property and other factors.
Does your company invest in any of the markets you offer?
We do. Prior to opening up any new market, we personally invest our own money with the same people our clients work with. This way we can track the teams performance in each market. We believe in our people, products and would not refer them to our clients if we were not personally invested ourselves. Our clients feel at ease knowing we are right there with them as an investor in the same markets with the same people. For more information please refer to “Our Process” page.
Are there any fee’s for your service?
We do not charge you a single dime for our services. Our compensation is collected from the seller’s, after the transaction is closed.
Who handles the repairs if a tenant calls in?
In each of our markets, we have a designated Property Management Company that handles all tenant related issues on the property. Your job is to be an investor and not a Landlord. Leave the calls to experts.
Are there fee’s for the Property Management Services?
Yes. Industry standard fee’s are 10% of the gross monthly rental income per month. The PM’s we refer our clients to charge anywhere between 6% – 10% of the gross monthly rental income, plus any applicaple fees. You are more than welcome to manage the property yourself, but we highly suggest leaving it to the professionals that know there market inside and out.
What if after some time I want to sell my investment property?
We can assist you through this process. We refer to this as your “Exit Strategy” and can connect you with a local licensed realtor. We may even have a buyer that is willing to purchase the home from you through our network or investors.
After I close on the property, do I need to find a tenant to rent out the home?
From start-to-finish everything is taken care of for you. After the transaction is closed, the Property Management Company will assist with placing a tenant in your property. Often times, a tenant is placed in the property prior to your transaction closing, which puts our investors in a situation to cash flow immediately after it closes.
What are the average home prices?
Depending on which market and neighborhood, on average the home prices range anywhere between $60,000 – $130,000.
What is the average vacancy rate for these rental properties?
We focus in markets and neighborhoods with less than a 5% vacancy rate. On average the Property Management Company’s are able to find a tenant in less than 30 days of listing on the open rental market.
Do I need to fly out and see the home before purchasing?
Absolutely not. Most of our investors never even seen the property(ies) they’ve closed on in person. We’ve created a process where investing can be done all from the comfort of your own home. Still our investors are more than welcome to fly out and see the property in person. Along with meeting the team that makes sure your investment runs smoothly as possible in each of the local market we are in.
What’s the appreciation like on these properties you offer?
Our focus are in “Linear” markets. What we mean by Linear is that home prices in these area’s stay relatively flat and see a lower appreciation overtime compared to a “Speculative” market like some of the coastal markets. Let’s use California for an example. Most of the coastal markets like California will go through real estate cycles every 7-10 years on average and prices will surge upwards and they eventually go down. Pretty much like a roller coastal. Investors in coastal states pay a much higher price for an investment property, while at the same time seeing a lower Return on Investment (ROI). Not to mention a lot of these states are Tenant Friendly and the law sides more with the tenants, rather than the landlords.
Now the Linear markets we are in, tend to be steady and even during the downturn of the real estate market, saw little to almost no depreciation compared to the coastal markets. These linear markets offer a much lower price, with a low point of entry to become a real estate investor. On top they offer a much higher Return on Investment (ROI) where our investors can actually cash flow positive after all expenses, on a monthly basis. Our investors also like the fact they can plant there money in a long term asset, that yields a higher return without worrying if the market will go up or down. Our markets are in Landlord Friendly states where the law sides more with you the landlord and not the tenant.
Where can I go to find a home inspector, insurance agent and/or other services in each market?
We got you covered. For home insurance, we can refer you to multiple company’s that specialize in working with investors on rental property’s. Same for home inspectors, Property Management and so forth. You’re always welcome to use your own vendors as well.
What types of neighborhoods are these properties located in?
Most of the properties we offer will be in either an “A” or “B” grade neighborhood. An “A” grade neighborhood is what we consider, good schools, low crime rates, tenants that earn a higher than average income, etc. Homes in these “A” grade neighborhoods will be priced higher than a lower graded neighborhood. A “B” grade neighborhood is more of a middle class with a median household income. We call the “B” grade neighborhoods the bread and butter, since the home prices are lower and will generally have a bigger pool of tenants, as compared to an “A” . We do offer investment properties in the “C” grade neighborhoods that appeal to investors wanting to pay a much lower price with a higher return. These “C” grade neighborhoods are considered to be lower income households with higher crime rates and low school ratings. Our staff can go over the negatives and positives of each neighborhood with you in detail.