BRRRR Vs Turnkey with a Full Time job

[Roland Brown]

Good morning,

I have been planning and preparing to build real estate income and am very close to begining.  As I have been pulling together capital to get started, I have also been researching markets, podcast listening and reading every book I can get my hands on to get a foundational education.

In my mind, with my capital limitations to get started I love the BRRRR strategy, I think I can make it through the Buy, Rehab, Rent, once before chasing loans if I stay in certain markets. One of my main concerns is that I have a full time job which takes up all my available time and brain most days.

So then the other options seems to be Turnkey but my big concern with this plan is that I will deploy all my capital and then need to slowly build up again using the cashflow before I will be able and ready to reinvest...

As I am writing this out it sounds very impatient but I am eager to break from the coporate world in a reasonable 5  to 7 years and I'd like to bridge into real estate to do so.

I am looking for feed back to know what other people have done considering Tunrkey Vs BRRRR?

-and what they would do differetly if they could?

[Arlen Chou]

@Roland Brown there are many strategies to making money in REI, but "sweat equity" has high rewards in an good market. McKinney is in the path of growth along the 75. I have a small factory that has moved from Richardson, to Plano and now in Allen over the past 10 years. Even though I don't invest in Texas, I like the market growth. If you are looking to go "turnkey" out of State, that is one way of doing things. But if you go "turnkey" in your own backyard, you are seriously making a mistake. That is just my opinion, and you know what they say about opinions... But my opinion is based upon my own experience.

In my mid forties, I decided to get into REI and I followed the DIY path. Youtube was my best friend. I taught myself everything from running copper pipes to cutting granite onsite. My cost of renovation was literally 20% of what was quoted by contractors.

Many people will say that you should get others to do the work.  However, I was "cash poor" and I was not about to get hard money or partners to complete the work.  I don't know what you do as a full time job, but saying it takes up all of your available time sounds like a excuse.  I don't mean to be rude, but that is the same excuse people use to get out of exercising...  At the time of my renovations, I was running 3 factories; in California, Texas and the Philippines.  I had two kids in elementary school, with several after school and weekend sports activities.  

Every minute that was not spent for work or family was spent on the rehabs.  That meant buying materials needed for that night during my lunch hour, and eating dinner in the car on the way to the rental.  It also meant changing out of my W2 clothes, into construction clothes at the job site and working for at least a few hours every night.  After working on the units, I would head home to do homework with the kids.  It meant no TV or going out with friends and no vacations for nearly 18 months (I rehabbed 7 units).  

But it also meant saving about $280k in renovation costs (based on contractor quotes).  It also meant I got a good feel for what a renovation should really take and how the work should be done.  Since completing the work, the rents have gone up 2.5x and the property value, based on recent appraisal, has gone up at total of $2M.

Everybody has time, it is just a matter of how you prioritize it...  Evaluate how much time you burn a day because you "deserve" to relax?  My opinion is that everybody has a few hours a day that is just wasted on TV, the internet, social media or pretending to be busy...  but again that is just an opinion ;-)

Good luck to you and let us know what you end up doing.