Why should I *not* invest in turnkey properties?

[Carter J.]

Hi everyone, I'm looking to start off in real estate investing. I've done a ton of research on BRRRR, flipping, wholesaling, and a bunch of other various strategies. They all have their various pros & cons. Given that I have a full time job that I don't want to leave (I have no desire to become a real estate agent, flip houses for a living, etc.), and given that I'd like to start off investing in real estate with little overhead, it seems like the best approach is to buy turnkey properties from a provider that I trust (and do all the research on, get reviews from other people, form a relationship with, etc.). I have a decent amount of equity in my primary residence that I can use to make my first few purchase. With my full time job, I can put a decent amount into savings each month such that I can buy multiple properties a year (aiming for ~$75k-$120k properties that would net 1% rent, rather than the 2% approach). I ran a bunch of numbers and it looks very feasible for me to build a decent portfolio over the course of 5-10 years with what appears to be little effort relative to managing rehabs, hunting for deals, etc.

Therefore, I'm pretty sold on the turnkey approach at this point. So I want to ask other people here: given your experience, what reasons can you give for *not* starting off with turnkey real estate? I'd like to know about horror stories, words of caution, things to watch out for, etc.

Thanks in advance!

[Ryan Mullin]

Biggest mistake in TK buying that I see from OOS investors is looking ONLY at cash flow when making a decision on what to purchase.  Cash flow is just one aspect of a buy and hold.  It makes me cringe every time I hear an OOS investor say "Im looking for strictly cash-flow properties".   Equity should be the goal.  Not just cash flow.  Its a mindset thats needed from acquisition all the way to year 5 / year 10, etc.