Next Step From House Hacking: Another One v. BRRR v. Turnkey

[Art Maydan]

So the bottom half of the duplex I’m living in is rented out and I’m trying to figure out what my next step should be (aside from getting a broker’s license. That’s happening.) I see 3 good options and I’d like to hear your thoughts:

1. Continue living in the current duplex and buy another 2-4 unit one year from when we bought this one under advantageous owner-occupied terms.
2. Continue living in the current duplex while investing in turnkeys. I had discounted this option because I’d rather do the work myself and reap higher rewards, but the only way I see to get even better returns than turnkeys is with a BURR-like strategy. I have the money for a 20% down payment on a $50-$100K house in Memphis or whatever now and I just bought this duplex 3 months ago. I’m still getting things in order here and don’t have the time yet to learn enough about rehabbing to be comfortable buying a fixer upper. Am I wrong? Is it easier than I think?

9 to 10-Cap turnkeys with management factored in are abundant. My duplex is a 14-Cap and it took me 9 months to buy and a lot of work. And work to manage. Getting into a turnkey for $10-$20K leveraged 5X sounds pretty nice.

3.Continue living in the current duplex while studying how to rehab houses, read fix and flip books, etc. Get my broker’s license. Find a house that needs some work, buy it, hire contractors to get it rent ready, rent it out, refinance. I know that the third option has theoretically the highest returns, but I also have zero experience with rehabbing.

What do you think about a turnkey as a stepping stone from house hacking to doing value-add plays? Am I overestimating the difficulty of rehabbing a house? Is it something I can do while working full time? What would you do?