How Turnkey Rental Properties Work: Property Management Mistakes to Avoid + Investor Strategy Tips

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Show Summary

In this episode of the Real Estate Pros podcast, host Michelle Kesil speaks with Taylor Miller, owner of Legacy Invest, about the intricacies of real estate investment. Taylor shares insights on how his company simplifies the investment process for out-of-state and international investors, offering a comprehensive suite of services including property acquisition, management, and insurance. The conversation delves into the importance of personal touch in business, the challenges of finding suitable investment markets, and the significance of educating investors on various strategies and financing options. Taylor emphasizes the need for strong property management and the value of building relationships with clients to ensure a smooth investment experience.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Legacy Invest’s Invest
    • Taylor Miller on Facebook
    • Taylor Miller’s Email Address: [email protected]
    • Taylor Miller’s Phone Number: (731) 324-3126

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Taylor Miller (00:00)
  The property management company is probably the biggest one. ⁓ They want to try and get the most return and they go with these cheaper just online only property management companies that don’t really know their house, don’t really understand their tenants and it ends up being a bad experience and that leads to them their house not performing the way it should.

  Michelle Kesil (00:15)
  Pfft.

  Taylor Miller (00:25)
  Out of everything that we do, the property management is the most important part.

  Michelle Kesil (02:02)
  Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Taylor Miller, who owns Legacy Invest, which is a one-stop shop. Yes, you’re so welcome. One-stop shop for investors. So excited to have you here today, Taylor.

  Taylor Miller (02:15)
  Thank you for having me.

  Thank you, I look forward to ⁓ talking with you.

  Michelle Kesil (02:26)
  Yeah, so let’s dive in. First off, for those not familiar with you and your world, can you share about your main focuses?

  Taylor Miller (02:34)
  So our main focus is to help out of state or even out of country investors with their ⁓ investment experience. When they’re wanting to get into real estate, we’ve done a really good job of putting the systems in place to simplify that. And you only have to vet ⁓ one party to be able to knock out most of your needs. So we do the turnkey aspect in providing

  you know, renovated turnkey investment properties. We do the management aspect, which is managing the property after you have closed and all aspects regarding to your ownership and the tenant placement and the tenants. And also we take care of the insurance portion. So that’s when, if you do like a loan or just any property, you should have insurance. So we all have that in-house and it’s a very quick streamlined experience.

  Michelle Kesil (03:26)
  Awesome. And what markets do you operate in?

  Taylor Miller (03:30)
  So right now we operate in St. Louis, Missouri and Memphis, Tennessee, and we are always looking to expand as other opportunities arise.

  Michelle Kesil (03:39)
  And what do you feel are some of the main keys that have allowed your business to grow and run smoothly?

  Taylor Miller (03:47)
  I would definitely say it’s the kind of the personal touch that we put on to the experience we have. We’re very personal. We’re a family operated business. So we’ve been doing this for 40 years. We understand what it takes to run a property management business, to keep the cost low and just to provide an overall good experience for our investors.

  Michelle Kesil (04:07)
  Awesome. And can you share more about what the experience looks like?

  Taylor Miller (05:01)
  So, but for the purchase side of it, they deal with me and we sit down, we go through kind of what their goals are, what they’re looking to accomplish, what they’re working with. And then we tailor a strategy that fits those goals, whether that be using like an IRA, a 401k, a P locks, which is your home equity line, whatever works best to.

  get to buying that property to get investing in real estate, we sit down and figure out what aspects we need to address and accomplish to do those goals.

  Michelle Kesil (05:37)
  Yeah. And so basically, what is the investor’s role then? Like, what are they doing versus what are you doing?

  Taylor Miller (05:46)
  So with an investor,

  they come in and they’re like, Hey, I’m looking to make X amount a month on a property. ⁓ I want it to have, you know, two bedrooms. ⁓ I have, you know, my heat lock to work with, or I can use my 401k and you know, what do you have that’s in like the $130,000 price range? So once we have kind of built out those type of criteria, we go to the properties we have in our inventory.

  And we kind of like, hey, based off of what you’ve given us to work with and what you’re looking to accomplish, we recommend this address.

  Michelle Kesil (06:23)
  Awesome, and then what do the next steps look like?

  Taylor Miller (06:26)
  So and then after we do that, we go under contract and what if it’s a cash transaction, we go straight into obviously the due diligence. If it’s working with a mortgage, we get in touch with their loan officer and kind of like, Hey, we need to get the process rolling. We can start ordering our appraisals. And basically from that point, we kind of make it more of a hands-off experience for them where we kind of handle all facets of the transaction so they can

  literally just walk through the process, whether than them having to know the process, we guide them with the aspects that have to be accomplished. So it can be an experienced investor or beginner investor. We can work with all of them to go through this process and make sure it’s done quickly. They’re educated on the steps that are needed. And for

  for what it’s worth, they can be making as hands off as they wanna be and just provide them the needed information and we just go from there.

  Michelle Kesil (07:26)
  Awesome. So it sounds like the investors just come with criteria and you take care of the rest.

  Taylor Miller (07:34)
  pretty

  much. That’s the whole goal is to make it just a very streamlined, smooth and easy experience where you don’t have to be on the up and up or be really educated in what is going on in the investment world. That’s what we’re here for. And with that more of me selling them a property, it’s more of us working as a team to accomplish their investing goals.

  Michelle Kesil (07:37)
  HMM

  Amazing. And so how do you find these properties?

  Taylor Miller (08:00)
  We have various resources. So any property that we sell to an investor, we own it beforehand. We’ve rehabbed it to our standards. So if it’s a property, I would sell an investor. I would keep it in my portfolio and just, we buy it from, agents who need or have clients who need to liquidate for various reasons, whether it’s an estate that’s selling.

  whether it’s something that that investor can’t get stabilized or just various reasons. It could be a foreclosure or something that’s very dilapidated. We go in, we do a full renovation. It’ll be an almost brand new house and it’ll be one of the nicer properties in that respective neighborhood. So we can get the highest intent we can get.

  Michelle Kesil (08:45)
  Yeah, that’s awesome. And like, are these usually like residential investments or what types of properties?

  Taylor Miller (08:53)
  These

  are mainly single-family investments. they’re I would say they’re usually in C plus to B plus neighborhoods. So it’s a good stable neighborhood, but it’s not going to be like an overly expensive neighborhood. It’s very ⁓ price friendly to get into.

  Michelle Kesil (09:08)
  Awesome. And so what are you most focused on solving or scaling to next?

  Taylor Miller (09:49)
  ⁓ I would say as far as scaling to, would really like to bring more of the process in house with the lending, with maybe getting a title company and really focus on making that experience easier for the investor. And that’s more of scale and with more so to scaling, I would really like to expand into a couple of other markets.

  and to be able to provide more properties and more property types to our investors.

  Michelle Kesil (10:18)
  Yeah, amazing. And so what advice would you give to new investors that are looking to get started?

  Taylor Miller (10:28)
  Don’t be afraid to jump into the market even if it looks a little rough. There’s always, if the numbers work, the numbers work no matter what market you’re in.

  Michelle Kesil (10:36)
  Yeah, and like how do you figure out how the numbers work for each person?

  Taylor Miller (10:43)
  So again, that goes back to their strategy. Usual says like, hey, I’m looking to get X amount of cash flow. And then we have our own criteria built in. It’s like, okay, so if we know we have to renovate it, we know we need to cover X amount on this property. So we have formulas and criteria built into our calculators and our AI models that calculate all of that.

  Michelle Kesil (11:08)
  Awesome. are you guys like when you said like using AI model, have you created like your own technology that does this? ⁓

  Taylor Miller (11:16)
  I’m not going to say we’ve created our own technology,

  but we’ve gone through and used, don’t know how familiar people are, but with APIs and coding, we’ve made it where everything is vertically integrated, where if it goes into our database, it automatically calculates it. And within about 15 to 20 seconds, we get fed back with, okay, hey, this fits into this model you’re looking to run.

  or hey, this is more of a buy and hold for your portfolio or short-term rental or whatever. And we know that within a very short amount of time.

  Michelle Kesil (11:53)
  Yeah, awesome. So what have been some of the biggest challenges that you’ve overcome in your career with investing?

  Taylor Miller (12:05)
  ⁓ I would probably say that is finding ⁓ markets that fit like investing that aren’t oversaturated kind of before they ⁓ become mainstream. It’s just doing the research and trying to identify what those markets are that you can get into before they get really big and it would be probably

  staying to the level of customer service we demand with having the systems in place and some of the growing pains that come with becoming a larger company as things expand.

  Michelle Kesil (12:46)
  Yeah, what types of systems are you needing to have in place for that?

  Taylor Miller (12:52)
  Well before it was

  okay. We didn’t have everything where it was vertically integrated and we went back and like from our sales software talks to our property management software. So it cuts down on the man hours and the basically what I call the wasted hours of data entry. We’ve cut down on all that by having it where they talk to each other back and forth.

  So we can focus more on the client and providing their needs versus doing just admin tasks that doesn’t really lead to anything minus wasted hours.

  Michelle Kesil (13:27)
  Yeah, definitely.

  Taylor Miller (13:27)
  So

  we’ve put the pieces in place where we can spend the majority of our time talking with our clients, talking with our tenants and making sure the overall needs are addressed versus having to make sure the information is correct.

  Michelle Kesil (13:43)
  Yeah, absolutely. So are your investors pretty hands off ⁓ after they like connect with you or?

  Taylor Miller (13:53)
  There’s a handful that are and some of them we talked to once a week or so on, but it’s a good mix. Some of them want to be more involved in some of them. They have multiple properties with them and I don’t think I’ve talked to them in six months to a year. Just everything’s clicking along and you know, there’s like, Hey, everything’s good.

  Michelle Kesil (14:11)
  Yeah, awesome. So is there any like criteria for investors to work with you or they just, yeah.

  Taylor Miller (14:17)
  Not

  particularly. So we work with all types of investors. So if they’re brand new or if they’re experienced, so it’s just like I said, we try to meet the needs of what they’re looking to do versus saying you’ve got to fit in this box. We kind of try and make the box fit what they’re doing.

  Michelle Kesil (14:32)
  Right. What are some, like, mistakes that you see investors commonly make?

  Taylor Miller (15:19)
  The property management company is probably the biggest one. ⁓ They want to try and get the most return and they go with these cheaper just online only property management companies that don’t really know their house, don’t really understand their tenants and it ends up being a bad experience and that leads to them their house not performing the way it should.

  Michelle Kesil (15:34)
  Pfft.

  Taylor Miller (15:44)
  Out of everything that we do, the property management is the most important part.

  Michelle Kesil (15:49)
  Yeah. And so do you have like a separate team that manages that aspect?

  Taylor Miller (15:55)
  Yes.

  Yes. So when we get to that part, there is ⁓ six people on the property management side doing various things that when a property closes, it directly moves from the sales side and the investment side over to the property management team. And all of the data that we’ve collected that points vertically integrated and goes with them. there’s that really double

  entries on the data part. Everything’s already over and they know what’s going on with that house.

  Michelle Kesil (16:25)
  Yeah, amazing. And so are there like what, because like when you say vertically integrated, like what exactly are all of the components of that?

  Taylor Miller (16:35)
  So it’s with the property and its information, the tenant and its information, the owner and its information, all of that is stored into our company database and then it automatically populates into the sales software, the property management software. So when everything gets over to the management team, they already have all that data.

  So they we can go just to managing the property. I mean, yes, there is an onboarding with the management team just to introduce ourself But it’s more of a hey, let me personally get to know you versus of I need xyz for

  Michelle Kesil (17:14)
  Right, so it’s more relational.

  Taylor Miller (17:15)
  So it allows

  us, it’s more, it’s definitely more relationship based. And that allows us to understand their needs better and manage their property better and more of what they’re expecting from the house because we actually get to know them versus just trying to put them in the database of, okay, this is person, this is Taylor Miller with, you know, property 123 Smith Street. This is like, hey, this is Taylor Miller and he’s looking.

  you know, to check in once a week and this is the information he’s looking for and whatnot.

  Michelle Kesil (17:49)
  Yeah, and are these usually long-term rentals?

  Taylor Miller (17:52)
  Yes, so we do a minimum of a one year lease, but we try to do two year leases on all of our properties. And usually a tenant stays somewhere between three to five years.

  Michelle Kesil (18:03)
  Awesome. What’s been some of the most profound things that you’ve learned through this work?

  Taylor Miller (18:12)
  ⁓ everybody’s different and you will see something new. ⁓ There’s always something new whether it’s a situation you run into with a property or just a strategy. There’s just always a new experience and you’re always learning and there’s always new technology that will allow the the company or the industry to expand and do something better.

  Michelle Kesil (18:39)
  Yeah.

  Taylor Miller (18:39)
  Always about trying to grow and do things more efficiently.

  Michelle Kesil (18:42)
  Yeah, absolutely.

  And so what are you guys educating the investors as well on how to continue with their investments?

  Taylor Miller (18:53)
  Correct. So once they come in, like, it’s like, okay, it’s like, Hey, I’ve got, you know, so much money to work with, but my house is paid off and I’m trying to acquire, we’ll say five properties. It’s like, well, if you want to go down that road, we could utilize, you know, you can look at getting a HELOC on your house. And we, if you wanted to leverage it out like that, you know, you could use a HELOC for a down payment to get, ⁓

  ⁓ rental property and then we could have that where they’re that covers that payment and You know, it’s like, okay Well, I’ve got an IRA that I want to figure out how to minimize my penalties and buy investment properties with so we have a couple of other members that team members that we work with that are not really in-house but they’re You know, they’re they’re team members of ours and we’ll refer them over to them and they’ll help them set up

  like an actual tax strategy that will minimize those penalties and we can use those funds and convert them to buy property.

  Michelle Kesil (19:48)
  Thanks

  Awesome. That’s great that you’re able to find all these ways to support the investors.

  Taylor Miller (20:01)
  There’s

  usually always a way. There’s usually always a way.

  Michelle Kesil (20:06)
  what is like one way that maybe most people don’t know about.

  Taylor Miller (20:10)
  ⁓ Just all the loan options that are out there I’m not gonna say there’s one specifically that’s more than the other but there’s just so many loan products and various loan methods to acquiring property and it’s just knowing the right loan officers and the right people that know how to navigate that environment that you can usually come up with something that will fit into that

  Michelle Kesil (20:18)
  I heard.

  Yeah, absolutely. That makes a lot of sense. Awesome. Right? Right. I’m sure it’s specific per individual. ⁓

  Taylor Miller (20:43)
  So I’m not going to say there’s one defined method.

  It is.

  Michelle Kesil (20:51)
  Cool. Well, before we begin to wrap up here, if someone wants to reach out, connect, and learn more about what you’re up to, where can people find you and reach you?

  Taylor Miller (21:01)
  ⁓ they can email me at Taylor at legacy invest net or they can ⁓ reach out on our website, which is legacy invest net. And I, ⁓ I have a phone number as well. So if they, I’m sure y’all put that in the description of things.

  Michelle Kesil (21:19)
  Yeah, or you can share it however you’d like.

  Taylor Miller (21:21)
  Sure. And then if y’all would like to contact me by that, is 731-324-3126. Sorry about that. ⁓

  Michelle Kesil (21:32)
  Yeah, perfect. Thank you. Appreciate your time and your story. Thanks for being here.

  Taylor Miller (21:37)
  Absolutely. Thank you for having me.

  Michelle Kesil (21:39)
  Of course, and for those that are tuning into the show, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Taylor who are building real businesses and we’ll see you on the next episode.