August 6, 2023

JF3258: Zach Lemaster — Exploring the True Meaning of Turnkey Investing and Why Now is the Time to Get in on Build-to-Rent Developments




Zach Lemaster is the founder & CEO of Rent To Retirement, one of the nation's leading turnkey investment companies that helps people achieve financial independence through turnkey investing. In this episode, Zach discusses the misconceptions surrounding the turnkey real estate investing industry, and what prospective investors need to know. He also shares why you should explore the build-to-rent industry now as overbuilding and increasing interest rates have made many deals available at below market rates.

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Zach Lemaster | Real Estate Background

  • Founder & CEO of Rent To Retirement
  • Portfolio:
    • Single-family rentals
    • Multifamily 
    • Commercial retail centers & luxury short-term rentals
  • Based in: Denver, CO
  • Say hi to him at: 
  • Best Ever Book: The E-Myth by Michael E. Gerber
  • Greatest Lesson: Date before you marry in partnerships.

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Slocomb Reed
Best ever listeners, welcome to the best real estate investing advice ever show. I'm Slocomb Reed. And today I'm here with Zach LeMaster. Zach is joining us from Denver, Colorado. He is the founder and CEO of rent to retirement. One of the nation's leading turnkey investment companies that helps people achieve financial independence through turnkey investing. He is also a licensed optometrist who practices on a volunteer basis.

His portfolio, Rent to Retirement, focuses on single-family rentals in some small multifamily, including build to rent deals. On top of that, Zach personally has several investments in commercial retail centers and luxury short-term rentals. Zach, can you tell us a little bit more about your background, which you're currently focused on?

Zach Lemaster - Rent To Retirement
Yeah, so first of all, thanks for having me. Super excited to be here. Big fan of what you guys do and just the content and education you guys are putting out. So it is a tremendous honor to be here and I'm excited to have a great show with you. Um, but just give you a quick 30,000 over foot view of myself. And so as you so nicely put in the intro, um, I started in a background in healthcare. So my wife and I focused on, um,

you know, that career path for many years. I was in the Air Force for seven years as a captain. So I was on scholarship. We invested in real estate starting really that entire time, even really in school, just eventually growing our portfolio over time to the point where we were able to replace our active income through real estate investing. That didn't happen overnight, but that happened over many years of dedicated investing. I think the real thing that allowed us to like...

expedite our goals and take us to that next level of investing is the simple fact of when we decided to not just focus on our local market that we knew and were comfortable with, but we started to go outside of our comfort zone and actually identify the best markets throughout the U S and start investing in those markets strategically and building our teams. And that really helped to expedite our success. And that was really the foundation of rent to retirement is we had a lot of friends and family and colleagues that were seeing what we were doing. They enjoyed.

you know, um, watching our success and they basically said, Hey, we want to invest with you. We don't have the time and energy and capital to do that. Um, and so that was really birthplace of, of rent retirement about a decade ago. And fast forward to where we're at today. Um, you know, we're stretched across 11 different markets, mainly Midwest, Southeast we're focusing, as you mentioned on, um, single family and small multifamily, these are either rehabbed houses or new construction about half of what we do is build to rent.

I think there's a tremendous opportunity right now in the build to rent space where we can offer turnkey products to our investors. We did about a thousand doors last year and we're on pace to do about the same this year. So that's a little recap about what we're doing.

Slocomb Reed
Zach, what are those 11 markets that y'all are in?

Zach Lemaster - Rent To Retirement
So we focus in the Midwest and Southeast. And so the Midwest, we're focusing in Ohio and Missouri. And these are different markets within these states as well. So our main market in Ohio is Cleveland and surrounding areas. We've done very well in this like secondary markets, like Barbaton, Akron area. We work in, um, Missouri. That's mainly Kansas city, Missouri. We have, uh, small operations in Detroit, Michigan, and Indianapolis.

That's about what we do in the Midwest. We do a little bit of work in Memphis and Little Rock as well. But the Southeast is probably where we're more active in, and this is particularly in the build to rent space. And so we have new construction teams in Florida, Alabama, and Carolina and South Carolina. But Florida is probably our most active market. We have building teams throughout the, throughout the state. And we also do a little bit in Texas.

Slocomb Reed

Slocomb Reed
Coming from your background, Zach, active duty military turned white collar professional building a rental portfolio on the side to replace active income with passive. Sounds a lot like the name of your company, what you were doing. Why go turnkey? Why is it that creating turnkey investment opportunities was the correct segue for you from there?

Zach Lemaster - Rent To Retirement
That's a good question. So look, I don't think anyone's really dove into the psychology behind, like out of all the different areas of in real estate investing, why turnkey appealed to me. Um, it, it appealed to me initially as, as an investor. When we started to, when we first invested, um, my wife and I, when I say

us or we started investing in our own properties, right? We self-managed, we would do the rehab if we needed to rehab them, you know, we'd acquire them. And that took a lot of time and energy and work. And I quickly realized like, I love owning rental real estate, but I don't enjoy being actively involved in them. It's just a lot, you know, and there's a lot of people that enjoy that. But I do think as you scale and grow your portfolio.

If you're truly trying to create the lifestyle, like the financial freedom or independence that so many of us are trying to achieve, like you need to have systems set up in place. So your business is operational, even if you step away from it. And I really enjoyed, like I always wanted to invest eventually with the idea of like being a somewhat passive investor where we can still acquire strategically properties, but it was really, so that's, that's like the lifestyle aspect of it. And because of that.

We were drawn to turnkey properties. Now, a lot of the stuff when we were first starting, we didn't like, they weren't set up turnkey initially, but we built the teams and the systems and all things in place so they could be turned key eventually, right? So we just had our local property management teams because we don't self-manage at this point in time. And so we had our local teams managing the properties and we're working with the top professionals in each one of these areas. And I've just found that it's a much better way to ultimately create the lifestyle and scale effectively.

without having to be actively engaged. And from a business perspective, we had a lot of people that approached us basically that were busy professionals, right? We come from a healthcare background. There's a lot of busy professionals that wanted really, that had the demand for the same thing. They don't wanna be active investors. They love their profession. They're probably never gonna leave their profession or maybe they wanna cut back at their hours eventually, whatever the case is, but they like to own rental real estate. And so we saw that niche that matched.

Zach Lemaster - Rent To Retirement
the systems that we were already setting up. Hopefully that makes sense.

Slocomb Reed
I think so, Zach, and I feel compelled to ask a fairly sophisticated question in a fairly crass way. As a turnkey provider, what do you actually do?

Zach Lemaster - Rent To Retirement
I'm glad we're going to, to ground zero because turnkey is one of these buzzwords, right? And, and, and there's a lot of people that have negative connotations of what turnkey is and, and unfortunately, and that's like any business, right? That's with syndicators, that's with raising capital. I mean, anyone in, in real estate or in business in general, it's if you have one of these broad buzz terms, like I don't even really, I think we operate in our own niche of the turnkey space. But when we talk about turnkey, I always wanted to find like exactly what we mean. Um, w what we talk about a slow come. When we say.

at Turnkey is a property that's either fully rehabbed or newly built, because half of what we do is new construction, leased and professionally managed in a market that we've identified to be a successful investment market based on our long laundry list of questions. And this is all done by teams that we've personally established and built in these different areas. And so the idea would be that someone can come in and they can easily invest in an area.

that is going to allow them to scale and diversify and grow their portfolio quicker than whatever else they're doing in rental real estate. Most of our investors, you know, some of them are completely passive and want to be hands off, but we have many investors that are professional flippers or, you know, they're active investors. They just need to, they want to scale and diversify in other markets. This is a great way to get started for an investor. If you just need some hand holding, or as we mentioned, busy professionals, they just want to be a little bit more passive. So that's

Zach Lemaster - Rent To Retirement
And I guess I'll stop there, but I know that there's, you know, maybe some common themes out there that would be good to, good to address as, as well. Because people may be coming in with a preconceived motion, like what is turnkey, right?

Slocomb Reed
Absolutely, and that's a term that gets overused so often. I am a residential real estate agent, used to be my full-time hustle, and I never saw the word turnkey accurately used in the listing of any rental property anywhere ever.

Slocomb Reed
Correct me where I'm wrong, Zach. You said you're building out teams in these markets, but you don't have property management in-house.

Zach Lemaster - Rent To Retirement
That's correct. Yeah. So property management, Slocomb, that is a, uh, a challenging business as I'm sure you will know. And what we found is that we've been, cause like we did at one point in time, you know, and we manage over a thousand units internally. And I've just found that, you know, it is probably better to focus on building local teams in the areas that are either already established or working with the right people to build the right managerial team and then giving them a framework.

of expectations tailored towards our business model. And what we found is that just finding, connecting, and working with the right professionals in the areas that we're looking to invest is a way to expedite, opening up a new market with the team that we know, like, and trust, and can likely do a better job of management than we can. This does not mean that we're not involved in management. This does not mean that we sell a brand new built house.

Southwest Florida or whatever the case is to one of our investors and say, good luck with management. No, we're actively involved with them. We have a frame. We have a whole vetting criteria. We have a whole system approach of like, Hey, you need to be vetting your tenants this way that you need to have, make sure that they're making three times a monthly rent. And so it's just that we don't have the operational ownership over that. And I do like the fact that allows us to detach from management a little bit where, Hey, if there is an issue, like we can step in and like leverage.

our relationship or we can assist that investor in finding another managerial team. But yeah, management is a tough business and very locally driven, right? Very legislatively. I mean, if you're investing across the country, you got to be aware of the local statutes and regulations, of course.

Slocomb Reed
Zach, our listener base is most familiar with commercial apartment syndications. Typically, you know, the value-add business plan, a targeted five-year hold period. You have a general partner who is doing the acquisition, structuring the deal, raising the capital from limited partners, and then doing some asset management while the property is within the portfolio of the partnership.

Slocomb Reed
It sounds like a good corollary between what you do at Rent2Retirement and that business model is that you are professional asset managers for other people's single family and small multifamily investments after you get them acquired or get them, in the case of Build2Rent, built.

where you're the one who makes sure the team is in place. You have all of the pieces of the puzzle put together and you make sure that the puzzle pieces stay together while your client, the owner of the rental, owns that property. Is that fair?

Zach Lemaster - Rent To Retirement
Yeah, I think so. I mean, obviously there's some key differences with our model. And I think we kind of both operate under the general idea of like passive ways to invest. But I would say that owning rental real estate will never be as passive as say giving money to someone that's going to invest, you know, as a, in a larger syndication type deal. But I do think my personal opinion, Slocomb is that, you know, it is, I think,

beneficial for you based on your goals and criteria, but there's benefits to doing both, right? Of owning physical rental real estate.

Generally, when you own, that's what we do is we help people acquire physical real estate where you're 100% the owner of the property. And ideally, you know, all the heavy lifting and all the managerial aspects and things are done by our teams. But you still have 100% property ownership, you can go out there and you can use leverage. That's a big thing. You do not need to be an accredited investor. You have 100% ownership of the property. So you're 100% the decision maker. But it is I would say that it is slightly more involved, you still need to manage your managers.

And so there's pros and cons but certainly you know because I invest in syndications as well. I know that really what's truly helped me build wealth over time is the ability to like physically own assets where I could have.

you know, some more control over those. I had the combination of the annual cashflow, but also that those homes appreciating over time, focusing on the single family and small multifamily. I think that's also unique niche where you have, you know, more stability if you're in the right locations, usually better appreciation, better financing options available. So it just really depends on what the investors goals are.

Zach Lemaster - Rent To Retirement
But I think there's a lot of benefit to actual physical property ownership, but that does not mean you need to be flipping houses, but also means you need to probably make sure you're doing your due diligence, managing your manager, just as you would with any investment that you do.

Slocomb Reed
I'd like to take this conversation in a different direction now and hopefully a direction that is new to you with all the podcast interviews that you have done or at least not the generic questions that you always get asked. Generic questions like the ones that I've asked thus far.

Slocomb Reed
Zach, I want to tell you a little bit about myself and my own investing. And then I want to hear you pitch me on becoming a turnkey provider. I will say I am in the Cincinnati market, so in Ohio, but the opposite end of Cleveland and the secondary Ohio secondary markets that you mentioned. And.

I was recently explaining to a long time friend in real estate what I'm building and he said oh you're going to be a turnkey provider. And I said well no but and now here we are and I get to be in front of Zach LaMaster and I have the next 10 minutes to ask him whatever I want so let's see how this goes.

Slocomb Reed
I started a little bit of background. I started as a very conventional real estate investor. Started with a house hack and started building a portfolio from there. Went full time in real estate investing. And one of the things I noticed, one of the things I realized very early on, but also realized to greater degrees as my portfolio scaled is that my portfolio was never big enough to justify the level of service.

that I could get from people working for me full time. You know, when you have a four family and then you have 10 units and then 20 and 40 units, you can't really afford full time help, at least in a Midwestern, in an affordable Midwestern market like Cincinnati. However, I was doing other things. I was also a licensed real estate agent. I had a little bit of house flipping. I was doing bird deals, so I had other things I needed to manage. So I was always looking to offload

more of the day-to-day responsibilities of managing my own portfolio. Where that led was realizing that if I managed twice as many units as I owned, I could afford a full-time staff to handle the day-to-day operations and my role in management would be managerial oversight direction of the company, where is the market going, where should we be kinds of things. I ended up doing the same thing with construction management.

I finally have my own rehab crew. Things are going really well, and I will never be without my own rehab crew ever again, ever. Never going to have to rely on other rehabbers, just to get things done within my own portfolio at least. But at the same time, in order to build the rehab crew that I wanted to know that my properties were taken care of, I need twice as much work to keep my guys busy. So I'm doing some rehab stuff, third party outside of the management portfolio.

to make sure I can keep the good people who are working for me on a relatively full-time basis happy and continuing to work for me doing great work on a full-time basis. Last year, I added HVAC. In fact, my HVAC crew right now, as we speak, is installing duct work in a single-family house, either flip or burr-style deal for an investor friend of mine.

Slocomb Reed
I can't wait to get plumbing in house because of how frustrated I am dealing with other plumbers that don't work for me, who don't go where I tell them to go when I tell them to go doing what I tell them to do. And plumbing seems to be the emergency that comes up that is addressable immediately that I cannot address with my own staff. And when I bring on plumbing, that's a plumber that I'll make available to other people as well, of course, for a fee, as any plumber operates.

I'm in the process of aggregating all of those essential services to having a rental portfolio or being a homeowner in general. Having them all in house for the sake of serving my own portfolio but also for the sake of providing high quality reliable services to others as well. When I got to that point in this conversation, maybe it was at a wedding reception, my buddy said, oh, you're building a turnkey company. And I said, well, no, but you know.

So tell me, Zach, should I be building a turnkey company right now?

Zach Lemaster - Rent To Retirement
Well, let me ask you this, Slocomb, because you're I mean, this is how it usually starts, right? I mean, same thing for us is we want to build our own portfolio. That's usually the case, right? No, most people don't come into this business and like, Oh, I'm just going to, you know, flip houses to investors and not hold any of them. Maybe some maybe some people, but certainly not us and not you.

we build these systems and find that, oh, just like this conversation you had, there's people that were probably interested in what you're doing and wanna, you're already helping friends out. But the question, let me ask you this, how many deals do you think you come across in your local market that you pass up, that there might be opportunity there, it's just that you pass them up because they maybe don't fit exactly your buy box. Would you say that it's a fair amount?

Slocomb Reed
Oh absolutely.

Zach Lemaster - Rent To Retirement
And it sounds like you've already built the systems in place to be able to, you know, if let's say that if that, that deal, that all those deals that you're passing up or that, you know, maybe it's a, every business is different and as your business grows, there's all sorts of different challenges as you get to different levels. But it sounds like, you know, you're.

keeping people busy. You're building a staff, in-house staff, in-house rehab staff, which is important to have. That way you have control of the quality and pricing and all, you know, consistency. But let's, it sounds like scalability for you, like you're growing your own portfolio, but you're managing building your rehab partners and your own portfolio. But it sounds like there's enough deals out there where if you had the staffing to rehab those,

you could still offer that product and the services to someone that just wants to buy that property and not think about it. Is that accurate to say?

Slocomb Reed
Yes, it is.

Zach Lemaster - Rent To Retirement
So in my opinion, and really the conclusion that we came to as well, and it sounds like we're, you know, you're the similar position we were at one point. Um, Slocomb is where like, we don't want to, we're investing in these different markets throughout the U S. Um, let's just use Kansas city. For example, we don't, I didn't want to own a house. Like at some point we hit our threshold of single family, small multifamily in that area of like what we're buying. I just didn't want to own, you know, thousands of single family houses in Kansas city, not because it's not a great market.

But I just had other things I wanted to put my investments into and diversify. So what does that mean? You spent all these years developing these teams and systems for your own portfolio. How, you know, would it make sense for you to have some quality measures in place and potentially extend those services to someone else following the same process that you've already done, which allows you now to monetize on those, all those deals you're potentially passing up because you're not keeping them. I think the short answer is, is yes. Right. Like that would make sense to.

Just scale your business, but there's a lot that comes alongside that, right? You start dealing with investors, you know, possibly across the country or internationally. You need to be looking at, you know, what are their expectations? Because turnkey investors, I will say this, I mean, this is certainly a conversation I've never had on a podcast, but turnkey investors, they're needy sometimes and rightfully so, you know, but they expect, I would say here's the thing if you're thinking about investing in turnkey, but a lot of the

Sometimes what we have to deal with, which is a huge challenge is we have investors that come in, they've never bought a house, they maybe own a primary, but they've never bought an investment house. And they really kind of think that turnkey is going to be mailbox money where they're never going to have any issues. Um, turns out, you know, if they have, it could be a productive rental property for two or three years, but you are the owner of the property. And so if you have a tenant issue, that tenant stops paying rent, loses their job, like that stuff happens, that's the reality of property ownership, no matter if it's turnkey or not. And so, you know, you got to.

make sure that you're setting people's expectations appropriately that, Hey, like this is all part of the game. Yes, we have systems and measures in place to deal with these things when they happen, but, um, you know, real estate still happens. You're still dealing with tenants. You're still the owner of the property. So there's a lot that goes into the turnkey model, but I'm thinking so come that, you know, with, with the reach that you have and the systems that it sounds like you've already built, you probably could serve a lot of people in your local market by extending those services to those people.

Slocomb Reed
That's a valuable insight and I know that we're adding value to a lot of our best ever listeners as well and not just me.

Slocomb Reed
Another angle to this, Zach, coming from your answer about the capacity to do more deals than I can buy by myself or passing on some deals because they don't quite fit my buy box for whatever reason. I think it's fair to say, generally speaking, or at least my perspective is, this perspective was made quite acute during the pandemic.

Real estate is a people business. The most valuable asset to us in real estate is people. And during the pandemic, especially, people were the most scarce of all of the resources that we need to be real estate investors, especially when it comes to manual labor. Not just meaning painting the wall, but all of the trades, everything mechanical, anyone, any person or any...

job description role that is required on the execution of a business plan with real estate, especially boots on the ground, that's what became scarce. And that's one of the reasons why whenever I come across good people who want to work for me full time and want to commit to me, I commit to them. And I find the work to keep them busy, because I know how valuable that asset is. By that asset, I mean the people who are the good.

quality people who do good quality work who are coming to me seeking work full time.

I have the capacity, as we were saying, to manage, property manage, construction manage, a larger portfolio than I have currently, and I'm offering third-party services. Why not max out my people resource, the number of deals, the number of properties I can manage, things I can rehab, with stuff I'm going to own so that I retain the upside of being that owner investor.

Slocomb Reed
at the same time? Why not just raise capital from partners and continue to be the owner? Why would I be a turnkey provider for other people who end up 100% owner of the work that I deliver on?

Zach Lemaster - Rent To Retirement
Yeah, this is a very good question. And I think this is in the minds too, of sometimes the people that are looking to invest in real estate of like, well, why would a, why would this person sell a property and not keep it right. Um, and why, like another, another version of this would be, you know, well, they're taking all the equity out of the deal. I'm buying it, you know, I'm paying a premium for this, which to me, it's like.

Especially over the past, you know, five, five or six years when we've had an extreme sellers market It's like isn't any seller trying to maximize their sales price on it At least in turnkey you get a property that's newly built or fully rehabbed with like a system to follow Do not expect a discount on a property unless it's pretty dilapidated So I thought that anyways, that's just one of my soapbox things but to answer your question Yeah, yeah

Slocomb Reed
Can I get on that soapbox with you before you answer my question?

Slocomb Reed
As a residential real estate agent who worked with a lot of investors, my answer to that specific question, why is it that you would sell? Why would I buy from you? The deal must have been better when you bought it. Or any question, why would I buy on market instead of off market when I can send out thousands of mailers and get my own deals? My answer, and I have the feeling this will resonate with you, Zach, my answer is it depends on your goals. The first thing you need to do as an investor.

is have your investment goals, have your investment criteria that you can judge all deals against. When you have good solid goals, criteria that will create the life that you want, and that criteria is reasonably realistic for the market conditions we're experiencing. Does it really matter how you come across the deal or where the deal came from, if it reaches your goals? Sorry, that's...

That's what I always end up saying to my clients. But back to the question of why not just try to own everything myself instead of providing Turnkey for others.

Zach Lemaster - Rent To Retirement
Yeah, you're preaching to the choir on that's Slocomb. And I think that it's like, people often have this kind of scarcity mindset instead of an abundance mindset of like, Hey, there actually is a win, win scenario in, in real estate transactions. And yes, if your goals, if it meets your goals at this point in your life, based on your resources, then take action on it. Right. That doesn't mean like you're being taken advantage of or someone like.

just because we're selling a property is because it's a crap deal that we don't want to keep. I hit a threshold. And so I think the answer to this, both to the person buying the property and internally, is just like, where am I at in my investing journey? There could be a version of this where it makes sense for you to do exactly what you said, where it goes to raise capital and just continue to do more and acquire your portfolio. But is that where you...

you know, is that ultimately where you want to be? I'll be quite honest right now, and I think this will help people understand this too, I'm not really buying a lot of single family and small multifamily at this point in time. Now I've built my wealth over...

you know, a decade plus of buying those asset classes and just letting time do what it does and, you know, growing that portfolio. A lot of what I'm doing now is I'm, I'm consolidating. I, and so like I've built this, this turnkey company where we know how to identify the best markets and build teams in those areas. And we're still doing that into rehab properties or build them and offer them, you know, in a cash flowing asset, in a growing market to an investor. Like we have all the systems to do that.

But I've already done that for myself. And so a lot of what we're doing personally is we're 1031 exchanging a lot of these asset classes and, uh, Slocomb I'm going out and I'm buying turnkey. I'm buying retail assets that are, you know, fairly recently built, you know, over this past year, we acquired nine commercial retail centers here in Northern Colorado, um, and this is just a lot of through trading up. And the reason we're buying those is cause I'm consolidating, man. This is what.

Zach Lemaster - Rent To Retirement
This is our plan and this has always been the plan is to trade up. This is how people build wealth in real estate. They

you know, they own rental real estate, let do time, let time do what it does or they do forced equity and then they trade up, right? They take the equity that they've grown, they maximize the tax benefits, those two things combined, doing consistently over time is like just the most traditional recipe for success in real estate, it just takes time. But we buy a lot of these retail centers that are like a five caps, that have 10 year triple net leases on them, that really are not like crazy good deals, but they're buying whole deals. And then we maximize the tax benefits, we do cost segregation studies

those and accelerate the depreciation and offset our taxable liability. But the big philosophy is we're consolidating. And so I'm just for us, we're not in a position where we just want to continually grow and grow our portfolio of thousands and thousands of single family, but we did at one point in time and it has served us quite well to do that in that asset class. So for you, the determination is, you know, is that where you're at or do you want to start, you know,

other asset classes, but still keep the machine running and still offer people great product that look at that point in their life, they are looking for that exact asset. Right. And so I think it's just, it's just important to be aware of, of where you're at personally and how you can still serve other people. And there, yes, there can be win-win scenarios for everybody in this, to your point exactly based on where their goals are.

Slocomb Reed
Zach, another thing that you said that I mentioned in your bio is you guys are doing a lot of build direct build to rent development right now. Again, that's a whole lot of skills being compiled on your part to create an investment for somebody else. What what why do build to rent right now?

Zach Lemaster - Rent To Retirement
And this is something that we are actively doing. This is probably the area in the residential sector of real estate where we're the most active, and I think we're the best opportunity is, and I'll pinpoint some reasons why. In general, I think let's just talk about new construction in general. I think when someone thinks about turnkey, they being passive, being hands off, having little maintenance, like honestly, they're probably thinking more about like a brand new built house versus an older house that's rehabbed.

But of course, new construction usually comes with higher price points. So there's, there's some cost benefit ratios with this, but generally speaking, we have kind of moved over the past five or six years, really moved a lot towards the direction of focusing on more new construction. About half of what we do now is built to rent new construction and single family and small multifamily, mainly in the Southeast and growth markets. Um, but we, we found that building properties allows you with new construction, generally we're identifying, you know, better growing areas, but generally speaking, new construction has less maintenance, attracts better quality tenants, has less turnover, less vacancy. You have better upside potential with appreciation and rental growth if you're in the right market, and we have better financing options available. We'll talk about an investor loan product, a long-term investor loan product where it allows investors to only put 5% down on new construction in select markets.

This is not a Fannie Mae Freddie Mac loan. You're not you're not house hacking. You're not having to live in this. This is a true investor loan for rental property, but it's just that's one example of unique financing options for people So we like new construction the challenges sometimes it's a little bit higher price point You know, you may have to wait a little bit for the house to be completed And the ROI the cash on cash returns year one when you look at a pro forma that you're looking at year one analysis maybe lower than say compared to a

rehab property in the Midwest, but long term, I think there's a lot of benefit to new construction. But here's a unique thing right now that I think is important for people to understand. If you're considering build to rent or new construction in the right market, we've just went through an interesting real estate cycle. And we didn't talk too much about like cycles and where we're at right now, but generally speaking, the market, it's slowed down a little bit, but not like we haven't crashed, right? We haven't, and this is really like market dependent. Every market's a little bit different, but interest rates just went through the most dramatic increase in the shortest period of time we've seen in history and but real estate really is like staying pretty stable. Yes, it's had a little bit of stabilization, which is a good thing, but what we found is there are a lot of builders that still kind of, you know, instead of pulling the reins back a little bit, they overbuilt based on demand to exit as if the market was going to continue like it was a year ago. And so really what this means is a lot of builders on their with their construction financing that is due in 12 or 18. We found that we've been able to actually come in and scoop up some of these properties at wholesale deals below market value. So without getting too into the weeds, basically what this means is that right now you have an opportunity that we did not have a year ago where you can buy new construction houses in good areas that have positive cash flow buying them below market value, so you have immediate equity into the deal, which is usually unheard of with turnkey, right? But there are scenarios where you can buy properties with immediate equity and use creative financing options with them where you can put as little as 5% down. All that combined.

We're doing a lot of build to rent where we're doing ground up or acquiring already built houses like that, both for ourselves and our investors. And I think it's just a really unique niche that we're super excited about.

Slocomb Reed
That's certainly an interesting way to go about turnkey investing, especially considering the oversupply of single family homes that have been built in some areas, taking advantage of that. Zach, unfortunately, we don't have time for a lightning round of questions. I do want to ask though, where can people get in touch with you?

Zach Lemaster - Rent To Retirement
Our website is the best place to go to find out more information about us, to look at our active inventory at any given point in time. We have 60 to 70 houses for sale across the country and to find all our social media. We put a lot of stuff out on our podcasts on YouTube about all things real estate. But our website is That's Or you can call 1-800-311-6781 to connect with our team to set up a time to learn about your investment goals.

Slocomb Reed
those links and that phone number are in the show notes. Zach, thank you. Best ever listeners, thank you as well for tuning in. If you've gained value from today's episode, please do subscribe to our show. Leave us a five star review and share this episode with a friend you know we can add value to through our conversation today. Thank you and have a best ever day.

Zach Lemaster - Rent To Retirement
Thank you.

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