finding better opportunities in properties that need work or move-in-ready rentals?

Question

I've been curious about how investors are approaching acquisitions lately.

A property that needs $50K in renovations might offer a better purchase price and more upside, but it also comes with contractor headaches, holding costs, and the risk of going over budget.

On the other hand, a turnkey rental might cost more upfront, but you can potentially start collecting rent much sooner.

I think both strategies have their place, especially depending on how much time and cash an investor wants tied up in a deal.

For those actively buying right now, are you leaning more toward value-add properties or stabilized rentals?

And what's making one strategy more attractive than the other in your market?

Marcus Auerbach · Answer

I used to BRRRR a lot, but the market has shifted and you can't get enough discount to make up for condition. I can get almost as much discount for just negotiating well, don't have to deal with a gut reno and can collect rent right away. Appreciation (in my market still the case, 6% YOY) takes care of the rest

Bradley Buxton · Answer

@Frankie Vozzi

Like many things in real estate investing, it depends.

For my clients, I usually try to find a little of both. Can they rent the property right away, but is there also a way to add value in the future? Maybe it’s a 3-bed, 1-bath with a large laundry room where a second bathroom could eventually be added.

A lot also depends on how much capital the buyer has. If most of their available cash is going toward the down payment and acquisition costs, a more turnkey property probably makes more sense. You don’t want to buy a project and then have no money left to do the project.

Experience matters too. For first-time investors, I generally lean toward turnkey properties or very light projects. There’s already enough to learn with your first rental without adding a major renovation into the mix. It will also be based on the strategy STR vs LTR. Most STRs will need some sort of work right away to make them nicer than the competition.

There’s also value in new construction. It’s done, it usually comes with a warranty, and you can often push rents higher because tenants are willing to pay more for something new.

For my clients, the goal is finding the right balance between income today and opportunity to add value tomorrow.

Matthew Morrow · Answer

@Frankie Vozzi Hey Frankie, me again! We lean value-add, but the rehab itself isn't the hard part. Managing the contractors and making sure the work gets done right is. A $50K rehab with a crew you trust can be a great deal. The same rehab with a crew you don't know can turn into $70K and three extra months. If you're newer, a lighter cosmetic deal is a good way to build that team first.

Aaron Zucker · Answer

Frankie — in NY right now, my answer is: value-add only if you actually control the rehab, turnkey if you do not.

A $50K renovation on paper is rarely $50K. On Long Island and in the boroughs I routinely see that become $65K-$75K once you add permits, a contractor delay, and 2-3 extra months of taxes, insurance and interest while nobody is paying rent. If you do not have a crew you trust and you cannot be on site, that discount gets eaten fast.

Where value-add still wins for me: cosmetic to medium work — kitchens, baths, flooring, paint — on a house that is structurally sound, with the big items (roof, boiler, electric, sewer) already verified, not assumed. I underwrite it with a 20% contingency and I price my offer as if the rehab will take 60 days longer than quoted. If it still works on those numbers, it is a real deal.

Turnkey is not lazy, it is just a different trade. You pay a premium, but rent starts in week one and there is no draw, no contractor chasing, and no surprise behind a wall. For someone with a full-time job or buying their first 1-2 doors, that certainty is often worth more than the forced equity they think they are getting.

Rule I give buyers: do not buy the rehab discount unless you can name the contractor, the timeline, and your walk-away number before you sign.

James Jones · Answer

Value-add, and it is not close for me. A move-in-ready rental in Memphis usually means I am paying for the other guy's rehab and his profit, and at that price the rent rarely clears the 1% rule. I buy BRRRR single-family under $100K that needs work, because the work is where my equity is made: finished ARV $180K to $265K, and a DSCR refinance at 70 to 80% LTV that gives me my capital back. The conversion is the lever — 2/1 to 3/1, 3/1 to 4/2, carport or garage into a master bedroom and bath, adding 400 to 650 square feet. A 3BR+ Section 8 house here rents $1,395 to $1,950. Turnkey rents on day one, but value-add pays me twice: rent and refinance.

Frankie Vozzi · Answer

Bradley, I like that approach of finding something that can generate income now but still has room for improvements down the road. It gives investors some flexibility without taking on a major renovation right away. Your point about keeping enough cash available after closing is important too. Are most of your investor clients in Nevada looking at long-term rentals or STRs these days?

Frankie Vozzi · Answer

Matthew, good to see you again! You're right, having the right crew can make or break the whole deal. And I like your point about starting with cosmetic projects before taking on bigger renovations. It's a much easier way to learn who you can actually count on. Appreciate you sharing that.

Frankie Vozzi · Answer

Aaron, I really like that rule about knowing your contractor, timeline, and walk-away number before signing. Especially in NY, where a couple of extra months can make a big difference in carrying costs. I also agree that cosmetic and medium rehabs can be a sweet spot when the major systems are already in good shape. Are most of your investor clients still looking for value-add opportunities, or are you seeing more demand for turnkey properties lately?

Frankie Vozzi · Answer

James, that's a great breakdown of why value-add still works for you in Memphis. The conversions are especially interesting because you're not just improving the condition, you're changing the property's rental potential altogether. That rent and refinance combination makes a lot of sense when the numbers support it. Curious, are you finding more opportunities through bedroom conversions or actual square footage additions lately?

Frankie Vozzi · Answer

Marcus, that's an interesting shift, especially coming from someone who's done a lot of BRRRRs. If you can negotiate a similar discount without taking on a major renovation, that changes the whole equation. Are you mostly buying stabilized rentals now, or still open to lighter value-add deals when the numbers make sense?

finding better opportunities in properties that need work or move-in-ready rentals?

finding better opportunities in properties that need work or move-in-ready rentals?

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