Midwest Equity Partner

772 Jackson, St Paul, MN. Bought as a turnkey from Calhoun Ventures (now Midwest Equity Partner)

I purchased this property in St. Paul, MN in 2012 for $65,000 it is rented for $1,590/mo. I made the purchase through Nate Armstrong at Calhoun Ventures. He has since partnered with others to form Midwest Equity Partner. I was impressed with CV's professionalism and reliability. These guys do not play games. Their numbers are legit and their price doesn't change. The transaction is very easy. You hand them a deposit check for $1,000 and they call you with upcoming deals. When they you find you one you like you wire the rest and they sign it over to you. My first purchase with them was very scary because I was planning to move back to China. I did find a reliable property manager and took the plunge. So far I have purchased 3 duplexes and a SFH from Nate and they've been averaging a 9.5% ROI not including appreciation in value.

I would say the biggest issue I've had is finding an efficient property manager. Back in 2012 CV just recommended outside property managers. Our has been reliable but expensive. Since then they started an in-house property management company for their turnkeys in Milwaukee. 

Full disclosure: I liked working with Nate so much I took a job working for him selling turnkey rentals in March 2015.

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Decent Provider

I have purchased 3 properties from Nate in 2 different markets (Duluth, MN and St Louis, MO) Communication: I toured several of his properties with him.  He is one of the more honest sellers I have dealt with.  Very down to earth, despite having such a large operation (3000+ flips from his teams, not a promoter).  He spent an entire day with me answering all my questions on his process.  Any issues I had, I could email Nate or his assistants and they would resolve when they could.  If he started having issues with Property managers, he would email me to let me know.

 The first time I did not follow his advice right away and am currently dealing with a PM issue in Duluth to the tune of around $7,000 in rents, poor rehab and deposits still owed to me. (several units).  The 2nd time I listened, switched and have a great PM in St. Louis he recommended.  One breakdown in communication occurred in St Louis with the bad pm.  No work progressed on a new rental for several weeks, all the while we were trying to get updates from the PM we fired.  When we finally contacted Nate (should have contacted sooner), the work started.  He was unaware there were any delays. Nate helped us find the local banks to work with.  All three properties are on 20 year fixed notes at 5-6% with 3 year balloons. The rehab quality is what I would call rental quality, cheap and livable.  Nothing is unsafe or ugly, but clearly rehabbed for rental purposes.

 On a  fix and flip we attempted with him that failed to sell, some obvious issues prevented the sale.  Had we toured the property we would have immediately seen these items the realtor he recommended did not mention to us.  Loose rails, ugly bathroom plumbing work, poorly laid out kitchen and a few other items.  Nate no longer uses the realtor or the construction crew, but its worth mentioning.  We had to rent this house through the new PM.  Got great rents for it, better than expected.  The rehab was also extraordinarily delayed due to the city of Webster Groves demanding ridiculous inspection items and waiting 2+ weeks in between reinspects.  I should also mention that that the Ferguson rental required a new water heater within 5 months and the Webster Groves property either had the AC stolen or it was never installed.   The Duluth property had 3 water leaks within 3 months. Property management its recommended property managers.  Nate helped us transition from one bad property manager in St Louis metro and warned us about the bad PM in Duluth.

Here's my numbers:

 4/2 1900 sq ft 2 car garage Duluth Purchase plus renovation: 69K.  Appraisal for refi was 93K  (85k projected) Down payment 8k Renovation after bad pm placed tenant: 5k + 1.1k for water leak Rents: 1100/mo.  (taxes are $1156)

Ferguson: 2/1 (2 non conforming basement rooms) with 1 car garage Purchase plus rehab: 53k.  ARV 63K  (60k projected)(less now due to riots 3 months after my purchase) Rent: 775/mo.  A bit less than projected at $800-850.  (Taxes are 1100) Webster Groves: 4/1 no garage Purchase plus rehab: 72k.  Cost me 12k in holding costs due to long delayed rehab.  ARV 94k.  Projected 105k. Rents $1150, projected was 750 from bad pm.

Overall: My experience was not great with all three properties.   Bad tenant placement from bad PM's, after rehab issues on all three properties, delayed rehabs.  I give 4 stars, because Nate has worked with me long after the purchase to resolve many of the issues.  His team is always responsive (within 24 hours or sooner).  I have equity in all three properties, and they all cashflow.  Despite the issues, I'm a much smarter buyer now, and I would buy through him again if the numbers work.  This time, I would have more of my own checks in place.  Old adage but true, trust but verify.    

Update 3/25/16:

As I mentioned in Brie's podcast I was willing to work with Nate again on another property because of his integrity and honesty.  It is a rare treat in this business to get both.  My wife and I were the money partners on the most recent deal.  We lent Nate 71,500 for down payment with the bank.   We lent the money late last year and the property closed 3/18/16.  Since we were places as a 2nd on the property (just below the bank), our money was returned the day of closing.  When all the numbers finalized, our profit split was wired to us.  $15,421.  A return of 21.5%.  Not bad for around 2 hours of work.

With more review criteria available on turnkey reviews, I have increased midwest equity partners review.  My wife and I will continue to go through Nate on future properties.

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