Turnkey investment vs BRRR Investing

[Quentin Jivery]

Where has everyone been seeing the most success? Just a general question! 

[Mike D'Arrigo]

@Quentin Jivery If you are doing a BRRRR in your local market, have plenty of time and experience and can manage to find a good contractor, know how to accurately estimate ARV and rehab costs, you might be able to do a successful BRRRR but that's a big if. There are a lot of moving part and you have to get each one right to be successful. Most people are not able to do it. One of the biggest challenges you'll face today is finding and managing qualified contractos and trades people with today's labor shortage. Another thing to consider is that the market is changing which makes estimating your ARV more challenging. I don't want to discourage you but you need to go in to it with your eye's wide open and understand everything that can go wrong. Even very experienced turn key companies lose money on some deals. If you have a busy lifestyle and little experience, turn key may be a better way to go with a lot less risk. If you choose to go the turn key route, here are some things you should look out for and avoid in a turn key company.

• Don't allow financing or a finance contingency (it can be a good indication they are selling above market value)
• Don't allow for your own independent property inspection
• Are not realistic with their pro forma's (i.e. they don't include vacancy or maintenance projections or use unrealistically low vacancy factors)
• Require you to pay for any renovation upfront
• Sell only in cheap. low end neighborhoods
• Don't accurately represent the neighborhood/property classification
• Don't have consistent rehab standards for all properties
• Don't provide a scope of work for the property
• Can't provide references of repeat investors