Turnkey

[John Powell]

I've been running numbers on turnkey in other states. I'm truly wondering if there is a point in investing in these properties after running the numbers. Typically, you see about 200-300 dollars in cash flow after expenses. I've seen a few posts ranging from 170-200 dollars for a single family home for CAP-EX. You deduct that amount and you're typically left with 100 dollars a door. What do most investors do to make their numbers work in their home areas? Also, with turn key would it be better to sell before all these expenditures hit. I was thinking about going to Kansas city, but at this point, I'm just considering house hacking and dropping a large down payment to not over leverage a property.

[Mark Shaffar]

@Simen Gundersen and @John Powell The hard part is comparing apples to apples. I paid 55k for my nicely renovated Milwaukee turnkey that rents for $875/mo. Even if I factor in prop. mgt., taxes, insurance, 10% vacancy, and 10% maintenance and a roughly $200 debt payment I'm still cash flowing in the $200-$300 you mentioned. Add in debt reduction, tax incentives, inflation and your looking at a pretty nice return even if you do add another 5-10% budget for capex. Throw your down payment into a bigger house in a nice neighborhood you think will appreciate better and that wipes out the cash flow (or worse, throwing money at it every month) and now you're just crossing your fingers hoping you didn't buy at the top of the market. There are myriad ways to make money in real estate investing, this is simply the argument for turnkey rentals