Feedback on turnkey

[Anja Brey]

Hi BP, 

I would like your input on this SF turnkey, 2/1, 1946, currently rented, new roof, new mechanicals, new plumbing, refinished hardwood, new kitchen, new bathroom. 

I calculated the vacancy rate quite high, as the company charges one month rent, plus a fee for being present during the section 8 inspection, plus touch up/repairs and I assumed that tenants leave every year, which I hope they don't. 

I appreciate your feedback. 
Anja

[Brent Coombs]

@Anja Brey The main problem with paying full retail for turnkey properties is that there is no assured "exit strategy" that will result in profit to you. (All the profit has already been taken out of this deal).

Recent conversations I have had with others who have invested in similar turnkey properties indicated that their REAL value is only $30-50k, not $70-80k!

Those same conversations have emphasized that the ongoing MAINTENANCE (and other) costs are higher than expected. 'Turnkey' does NOT mean 'maintenance-free'! And, your vacancy-rate might still not be enough (it IS good to calculate conservatively, covering worst-case scenarios)!

You will find that in general, the BiggerPockets forum aims to help investors avoid the traps inherent with paying full retail. Cheers to BiggerPockets. All the best...