Business
Today’s guest is the CEO of Spartan Invest, and the third guest from the company to join the Podcast! Lindsay Davis is on the show today to talk about their full-service turn-key company. Spartan does so much for REI Live, Birmingham, and even the nation. They cover everything from their business model, property management, the real estate market in Birmingham, tenant placement, and how they work with wholesalers. Key Takeaways: [1:15] At Spartan Invest, they are a full-service turn-key provider that will purchase the property, renovate, rent, and sell to investor clients, in addition to managing the properties after the fact. [2:25] Lindsay and Brian discuss the market conditions in Birmingham. There is a great deal of job growth, and resale values are high right now. There’s been increased competition in the turn-key space. Spartan primarily focuses on the outskirts of Birmingham, in single-family homes in places like Hueytown, Bessemer, Pleasant Grove — basically a circle around Birmingham. [5:03] They’ve ventured further out in order to be able to offer their investors diversity. By being able to expand, it allows a single investor to be in several markets with a single point of contact. Getting into some of those other markets (Huntsville for example) has allowed them to get prime turn-key properties. [7:35] Lindsay and Brian talk about the difference in the rate of return and appreciation between Huntsville and other markets they’re in. [9:00] The biggest thing that sets Spartan apart from other turn-key companies is the service aspect. Since they handle all aspects of the process, that enables more people to be able to invest. Their long-term goals also add an accountability piece that makes these transactions more like a life-long service relationship. [13:05] The market inventory is down nation-wide. Inventory is getting purchased quicker, and for Spartan, it’s been a struggle in the past when the demand gets higher than they can fill. Quality of service is always a top priority, so their inventory stays at a number they can comfortably manage. [14:45] In property management, there can come a point where the service drops off. Lindsay talks about some of the challenges they’ve faced, and what corrections they’ve put in place to help that. They added a second Client Services manager, and the managers contact all of the investors once a month to keep them updated on their accounts. [17:00] Lindsay talks about some of the qualities of a good property management company. You want to check on things like their occupancy, maintenance ratios, and renewal rates. [19:15] Many investors are impressed and satisfied with the property management through Spartan and Alabama Rental Property. One of the big advantages is that Spartan has done all the renovations, and has fixed these houses up for the long-term. If they began to manage other properties, they couldn’t speak to the quality of those properties. [20:40] The average stay for their tenants is about 40 months. They offer two-year leases and have criteria for their tenants before they will rent to them: 550 or better credit score, 3X rent in income, no evictions or bankruptcy in the last two years, no felonies in the last seven years. Their criteria are constantly evolving. [23:10] In addition to turn-key, Spartan also works with wholesalers to buy properties. What drives their purchase power is what it will rent for. They’re usually around the 1% rule. [25:40] To send potential deals, email webuyhouses@spartaninvest.com. Their admin will send them to the appropriate agents to be evaluated within 24 hours. [26:35] Some of their long-term goals are getting on the ground on Huntsville (which they’ve already started) and are also looking for their next market outside of the state of Alabama. Mentioned in This Episode: Meetings Daily REIA Show REI Facebook Page Brian’s Book Spartan Invest