1 BRRRR or 3 Turnkey??

Question

I am ready to buy my first real estate deal. I have chosen my stragety of buying Duplexes, Tri's, and Quads. I have heart for multifamily RE.

What are BP members thoughts on wether to buy 3 turn key over the next 6 months. or buy 1 BRRRR stragety duplex? I have the ability and contacts to do both.

My goal is to start building extra passive/cashflow.

Thanks!

Steve

JD Martin · Answer

Depends on your abilities. With turnkey, you are paying to play. BRRR is your sweat equity entry, even if you hire everything out.

My opinion/viewpoint only, but a lot of TK are properties that have minimal/no/negative cash flow and are marketed to newbies. These may be unsuccessful flips or homes specifically designed for the purpose. In those cases, you are banking on appreciation that may or may not materialize. If a property has strong cash flow, appreciation can theoretically be zero, or even negative, and you will still make money.

Jailen Holt · Answer

Depends on the true numbers of both

Ali Boone · Answer

Hey Steve! Ooh, you are in Redlands! My parents just moved out there a year ago from Georgia and I go out there all the time to hang with them now. Was just there this weekend.

Are you talking about buying in Redlands, or nearby, or somewhere completely separate?

The main thing is to know that the two options you present offer completely different levels of time, effort, skill level, and risk. So I would go with the option that is most suited to how much time and skill you want to spend on it, and how much risk you are willing to take on.

Brandt Smith · Answer

@Steven Barros you use a hard money loan for the rehab and refi into conventional after a few weeks. In the right situation you can come in with minimal out of pocket. Call a few hard money lenders and they can help you.

Steven Barros · Answer

hmmmm hadn't looked into hard money with a double close.... how does that work?

@Brandt Smith

Steven Barros · Answer

Looking at deals with $200-$250 per door, after PITI, Cap ex, Vacancy, etc...

Now what i cannot speak for is Turns.. when it comes to turnkey, however I am note sure you can account for that with a BRRRR either.

@Jd Martin

1 BRRRR or 3 Turnkey??

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