Real Estate Battle: Turn-Key vs Fix & Flip: Which one works best?

There’s so much information out there about Real Estate and what investments work best, but as with many things, it will always be a trial and error run for you and your business to see which one wins the battle, but we’re here to tell you from our experience which one of these works best (for us) and why you should probably try to work on either one of them, so as the beginning of our 3 part series, Real Estate Battle, let’s dive into our experiences and which one will ultimately win this battle!

But first, how is this going to work? We will give you the pros and the cons of each investment and at the end, we will explain which one has worked for us the best! So let’s get into it!

Turn-Key

A turn-key property is basically a house with everything done to it, there’s no extra fix-ups, or anything like that, just a perfect house you can hold and rent for a while to appreciate the price or just enjoy the passive income!

Pros:

-With this type of deals is how little involvement you have to have with it to make it work, you can sit back and relax while this property keeps giving you amazing results.

-Finding this type of deals isn’t that difficult, you could be working with a Real Estate agent or a Real Estate company, like us here in Gator Property Ventures, and they will provide you with the best deals for the area you’re thinking about!

-You don’t have to hire a ton of people to work along with this type of deal, it will require most likely only you and a property manager if you want to go the extra mile!

-This is what’s called passive income, so it means you will have a cash flow every month from this property, which is an attractive asset to have!

-The best part of it all is how immediate the gain can be because as soon as you own the property you could be cashing in and if already buy with a tenant in it, even faster!

Cons:

-The biggest issue with this type of properties can be seen with the price tag on these properties vs the overall ROI of it, since everything is ready to go, it will usually be at retail price may be a bit over it too, so when it comes to finding out if this is the right type of deal for you, make sure you have a good deal of the income and any expenses that come with the property, so you’re never under water.

-Involvement can be a very tricky thing, obviously, if you are looking for a passive income you want to be as passive as possible, that also means you’re not involved at all with the business and it can be a weakness.

-Dependance, you will depend on your properties performance, so if anything goes sideways with it you might lose the tenant and then lose your income, so in those cases, properties become a loss rather than an income.

Fix and Flip:

The premises of a fix and flip deal is basically to buy a distressed property, fix it up and resell it for a quick buck, these kind of properties are usually pretty inexpensive once you buy them and the ROI is faster and in bigger amounts!

Pros:

-Experience! The biggest pro when it comes to purchasing a fix and flip property is literally experience, you will learn so so much of the Real Estate business doing one that it will make you more educated and ready to move onto different maybe even bigger projects in the future!

-Obviously, you do business, any kind of business based on the profit and with this type of deal, the profit can be large, if and only if it’s done correctly!

-The time in which you get your money back is fast, it can be done as soon as you finish fixing it up and put it up for sale, considering it doesn’t last long in the market this type of deals can be gone in no time!

-If you know anything on Real Estate you would know that everything here is done better with referrals and this type of deals bring in a lot of networking opportunities since you will be working with people in different areas of the business, so they could be giving you a good referral!

-Overall, making a complete 180 change on a property is a personal success and this is too, why starting on a deal like this can be so super exciting!

Cons:

-While you get experience as a con you also get money loss as a con! As in every business there’s always the risk of losing money impregnated within it, but truth be told in this case it can be more present than ever, as you are buying a property that potentially can have some serious damage in it, you never really know what will also appear once you start fixing it up, this can then lead to you having to pay things out of pocket or using the money for your specific plans to fix the damages that show up along the way, making it far too expensive and then when you try to sell it back out it might not sell for the price you spent on it leaving you under water again and back into square one.

-Time and effort! When it comes to these type of deals, you have to put a lot of time and effort into it to make it work the best it can and it is a very draining job since you will be running around trying to make everything look and work as best as possible for your future sale!

-Stress is the biggest factor here! There’s a lot to juggle, taxes, mortgages, building, fixing, finding the right deal, getting a tenant and a buyer in place! There’s so much to do and usually, you have to do it quickly which makes it even harder for you to work around it! So stress is a huge factor when it comes to this type of deal because it’s also a deal you have to be heavily involved in.

These two type of deals are actually vastly different one from the other and both work for different type of investors, there’s always those looking into something they can get some money out of as passively as possible and there are others looking for something in the business right into the middle and working their best around it, but from our experience we can give you some tips if you haven’t decided which one you want to be, and all of them come from our personal experience!

So, hear us out first: do both! What?! Yes! Basically we have done both deals into one, and the way we have done them have worked wonderfully for us, this is what is called Fix and Hold, you buy a distressed property and put the work into it and once is done you hold it and enjoy your passive income, and there are ways for you to get a fix and flip amount of money on it even if you don’t sell it after it’s done, so let’s get into it!

If you go over our website to the Before and After page, we have in place, you will see how many projects we have taken upon ourselves to work with, but there’s one we are the proudest of on Hollywood, Florida that is right now one of our most satisfying works! We bought this deal for $20,000 and invested a lot of money in it to make it the best cash flowing deal we could and now is currently rented for a good price! There’s a lot of factors going into deals that will make you understand this type of concept right away, so let’s get on the tips:

-Get a low price deal, this can be a foreclosure, a short sale, or simply a property in poor conditions needing a fix up really bad, you can buy properties that are around the price of the lot if you look close enough, in our case this property was around $70,000 and we negotiated it for our last price which was $20,000, it was an abandoned house and it needed a lot of help.

-Work with a bank! The idea of working with a bank is to basically purchase a cheap property, work around it and appreciate it in price, so when it’s ready you can get a refinance on it and get a good ROI!

-Get your property in for the section 8 aid program! You will need to be careful with it and review well enough who is going in the house and who isn’t!

-Insure your property, that will make it a safe bet for you in case anything goes sideways in it in the future as you rent it out!

-And be confident in your decision! Stick it out and work around it until the end so you will be able to see who your property becomes a great source of passive income at the end of the day!

So these are our tips, let us know if you guys agree! Also, let us know what type of investment is the one you’re most interested in! What has been your experience? Let’s have a conversation!