To Turnkey or Not...That is the Question

[Rodney Phillips]

I'm currently weighing my options between a potential rehab rental SFH and a few turnkey duplexes. I've seen many discussions and heard even more stories about doing the BRRRR method but not as much on buying turnkey. As much as I'd love to grab my first multi-family home and all these duplexes I've seen would likely cash flow, I'm just having a hard time considering a property that is being offered at a retail price. Not to mention a $190,000 property would nearly drain my savings.

I'd like to hear some stories from others about why/why not purchasing turnkey properties is a good option. 

[Theresa Harris]

You have three separate things going on.

I agree with Stuart.  You can add the value to the single family, but it will take time.  With the turnkey, you are up and running right away.  In theory, the turnkey shouldn't require any repairs.  The reno on the other hand may go over budget with unexpected expenses.

The other question is single family vs duplex.  Run the numbers on both properties.  The duplex has the advantage that if one tenant moves out, you still have rent coming in.

Lastly, your savings.  Are you comfortable almost draining your savings?  With a single family we go back to the renos and what happens if they go over budget or take longer to do.

I have 4 rentals and two were turnkey and two were rehabs.  One we ran into unexpected problems and had to gut the bathroom.  I had the money in the bank to cover it, but it took much longer than expected to get it ready to rent.