Tempted to buy a rehabbed home on Zillow

[Carolyn L Delli Santi]

Hi Everyone! I am strategizing my first investment and am tempted to buy a property through an agent for a STR. The home is already rehabbed and ready to go. There are many opportunities in the area for fix and hold, but my son already owns a dozen rental income properties in the city and the last one took him ten months to rehabbed because of labor shortages and supply chain issues. My son also has a property management company and believes the home will rent ST for at least 1% of the PP. I know I will be spending much less on a fixer, but I don't want to have to deal with the unknown costs and timing of a rehab. Thank you for your feedback!

[Dave Stokley]

I only buy turn-key or nearly-turn-key properties, and everything I've ever bought (closing on #7 next week) has been on the MLS. Unless there's incredible equity to be gained by rehabbing, you're missing out on significant STR income (and investing a ton of time) doing the rehab. All of the reasons you cited are very real concerns.

1% of the purchase price is a little low though. I'm typically looking for an absolute bare minimum of annual revenue being 15% of the purchase price, but preferably more like 20%.