Turn key versus BRRRR

[Caroline Landreth]

Hi everyone,

I have a hypothetical for you and I am new here so I am sure this topic has been previously discussed somewhere in the depths of these forums so forgive me for just outright asking and not diving into that but I would love to know Pros/Cons to the following scenario. Say you have $900k to invest would you prefer .....

A) Invest in x3 $300k houses that are turn key ready to rent (have already been nicely Reno'd so no capital expenditures needed in near future) and are in desirable locations so that the property will appreciate more over time

B) Invest in x4-5 $150-250k houses in less desirable areas that are also turnkey

C) Same as B but need to be rehabbed 

I ran some quick calculations and it looks like the cash on cash and annual ROI are better in scenario A with some decent cash flow as well, and in my opinion less headache of rehab and just simpler in terms of management since there are less properties and little to do other than regular maintenance for the near future. Am I wrong about this? Am I not considering something? Thanks!

[Sherief Elbassuoni]

It all depends on your experience and available cash.

With BRRRR deals now, you may want to hold on the property a little more, or do a refinance now, then refinance again in 1-2 years to lower the interest rate.