Beware Of Companies That Sell Turn Key Real Estate Rental Properties


Every day, real estate investors receive offers that just sound too good to be true.  In the past, these offers came through e-mail, telephone and trade shows.  As with all scammers, they have one goal — to separate you from your money!

One of the “opportunities”  that I am seeing is under the guise of  “turn-key rental property” sales.  These companies sales pitch is that they take care of everything for you.  They find the deal, buy the house, fix it up, get the renter in place and then manage the property for you.  All you have to do is collect the check!

Be careful. Remember the old adage, “if it looks to good to be true, it probably is”

The most abusive are the folks in Tennessee who work with real estate information gurus.  They pay a commission to these real estate gurus at $4,000 per house sold to their students at seminars.

I can imagine that if I make a call to ask them to explain their pro forma, they will have their lawyer threaten me with litigation. (What else is new?)

 Here is what they do: 

 Here is what they should do:

Plus the rent!  They use an inflated rental fee – $150 over normal and their lease up fee is one whole month, NOT the $516 used in the calculation. 

This in fact reduces the NOI by another $2,316 to a total of $4,327 to a true net return of just 4.87%. or a 44% misstatement of the number presented in their proposal/pro forma.

They either do not understand generally accepted real estate accounting principles or they are consciously bending the rules. This is plain misrepresentation.

What’s worse in my book, is that this company runs a Mastermind group to teach other turn-key real estate companies how to promote to investors so they can also rip people off!

Buyer Beware!

Guest Author – Andrew Waite
Personal Investor  Magazine
http://www.personalrealestateinvestormag.com/

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4 thoughts on “Beware Of Companies That Sell Turn Key Real Estate Rental Properties

  1. Robert Kim

    Robert Shemin, Ron Hillman, and Jim Altier did this to a bunch of people in these “turn-key preconstruction lease-options” in Las Vegas back in 2005-2007 and a lot of people lost a lot of money. I heard that Hillman and Shemin are back to selling these “awesome deals in Las Vegas after the market crash” to the newest batch of suckers. The company they did business under was My First House, Inc. that is now defunct. The idea was for Shemin’s students to use their credit and down payment money to build lease-option homes for people who had bad credit. A Realtor named Ray Colledge in Utah was also tied in with Shemin as Shemin’s “head mentor”.

    Reply
    1. JOE SMITH

      PLEASE SEE A FEDERAL LAWSUIT FILED AGAINST MR. HILLMAN BY MR. SHEMIN FOR MISREPRESENTATIONS BY HILLMAN.A FEDERAL JUDGE HAS ISSUED A RESTRAING ORDER AGAINST MR HILLMAN.Also MR COLLEDGE HAS NEVER BEEN EMPLOYED BY MR SHEMIN.

      Reply
      1. rkim777

        Ray Colledge was “head mentor” of PREIG (Professional Real Estate Investors Group) in Sandy, Utah. PREIG was hired by Robert Shemin to coach his students. So, yes, I’d say that means that Ray Colledge worked for Robert Shemin.

  2. Pingback: If it smells like a rat, it probably is. REWW.com « Real Estate Information Marketing Scams Exposed

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