One of the biggest risks, in terms of a buy and hold strategy like turnkey rental properties, is vacancy. Ask a landlord or turnkey investor if a vacant property makes them happy and you’ll likely see a dramatic reaction. It’s never good but it’s something that happens. It’s part of the game. Now, imagine this. You buy a turnkey rental property and it sits vacant for three months. Or worse, you buy a property still in rehab and you’re promised it will be done in two weeks. Two months later, it’s still not complete. And even worse? You’re not collecting any rent. You are losing big time. Is there any way to avoid this?
Yes. Our Rent Promise. It’s the easiest way we can say “We got you. Don’t worry.”
At Freedom Real Estate Group, we offer a Rent Promise with every property we sell. In a nutshell, it protects your cash flow. If you purchase a property from us, and for any reason it’s not cash flowing (rented) within 30 days of closing, we start paying the projected rent. Yep. We pay the rent.
Here are a few instances when this may need to happen:
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You buy the turnkey investment property with cash before our rehab begins.
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You buy the property with cash while we’re in the middle of rehab.
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You purchase with financing but there isn’t a tenant in place 30 days after closing. (Rarely happens.)
The Rent Promise mainly comes into play with cash buyers. Afterall, that’s the risk a cash buyer is taking, right? They pay cash up front and their property never gets finished. We’ve heard that horror story. The Rent Promise not only ensures you start getting the cash flow you were projected, but it allows our team to make sure the rehab is done properly and timely. We’d be out of business really quick if we paid every property’s rent every month. Generally, we don’t have to pay rent promises. We get the rehabs done in a timely manner and get the properties rented quick (usually 2-4 weeks). There have been instances where do use it and trust me – the saavy turnkey investor is happy that we offer it.
For cash buyers interested in turnkey investment properties, this is a win-win. You can pick up a deal with great numbers quick and not worry about when you’ll start getting paid. Of course there is always the option of doing a cash out refi down the road if you want to get some cash back. However, cash is definitely king in purchasing and we sweeten the pot even more with our Rent Promise.
On a side note, we’ve gotten the “Why in the world do you offer that? Seems like it could be a business killer.” Well. That’s correct. It could be.
If we were a terrible company with poor rehab timelines and were just awful people, it would be a business killer. However, we know our quality, we know our team, we know our product. We know we can offer the Rent Promise because we are able to come through for our investors and clients deal after deal. Is there really any better way to show you’re confident in your product than to offer to pay if it isn’t producing? If you had the option to “secure” your cash flow right away, why wouldn’t you? It’s a no-brainer.
Want to learn more about Freedom Real Estate Group or our Rent Promise?
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