My first investment property, I’m trying to figure out if I should go with a move in ready, tenant occupied property OR a fixer upper.
The tenant occupied property has had a roof replaced less than a year ago (tear off), furnace is 1yr old water tank from 2007 in great condition. Owner has had the property for 18 yrs and is moving out of the state. Tenants are current on rent and are both long term tenants.
Fixer upper is just that, 20K less than the tenant occupied property but has a few things that need to be done. Tenants are current in rent but are not long term tenants. Lease is currently month to month.
Maybe I’m just talking myself out of it but I really don’t know what to do. What’s the best decision. What would you do?? Someone help 😫😫
For your first investment, I would go with the easy one. Besides $20K isn't enough of a discount to get me interested in a fixer-upper. After repairs and holding costs, you may be under water vs the fully-repaired one.
BTW, don't talk yourself out of it. Get in the game.
I agree with @Greg Scott . A 20k difference will be eaten up quickly, and then some, by the fixer-upper. Why not buy the one that is already in good shape and owner is moving so has to sell. Both long-term tenants are current, this is a win for coming in safe.
Do you have any fixer skills yourself? If so, it might be a consideration.....but as has been said, $20k is not a lot of money, and certainly not worth the aggravation you may encounter......
Take the easy one this time, or go find a bigger fixer that is $75k less. And then get ready to get your hands dirty and spend every waking hour at the place for the next couple months..... :-)
If all things are equal, like the others have said, a “turn key” may be best. However, you need to look at the age of the fixer upper and most definitely the current and future rents. Put this data in the calculator and quickly make a decision based on cash on cash return.
Depends on your goals.
If you are looking for a hands free (as long as the tenant property cash flows well) investment where you don't have to fix anything go with that.
If you want to add value and BRRRR in order to pull your investment out so you can scale go with the fixer upper. Make sure all the numbers work.
If you need help running the numbers feel free to reach out
@Greg Scott thank you!! It’s a huge investment and I overthink everything! I put an offer in today for the turnkey investment. Wish me luck :)
@Jonathan Greene thank you!!
@Bruce Woodruff no skills AT ALL lol thank you!!
@Bryan Mitchell appreciate it! :)
@Cody Neumann $788/month on payments and rent will be increased but currently it’s $1500 coming in each month with the potential of having at least $1650/month.
@Cody Neumann I am not a numbers person but it looks good, I think???