All Forum Posts by: Daniel Mendez

What is their incentive to do all of that for you? Why would they specifically seek something like this out for you? Sure I run across these types of deals every now & again and I shoot them out to my buyers but not at a frequency where people could build an entire strategy off of that kind of stuff. It's a 1-off when someone who can identify everything needed to pull off a BRRRR is gonna pass it off. You've got to know what you are doing to get this done well and consistently. To put it into perspective going into it without knowing this stuff is like saying hey I want to make a billion-dollar tech company. I am going to hire a CEO at $350k per year & tell him to get us to a billion in the next 2 or 3 years.

Make sure you have plenty of cushion in your numbers because as a first time investor, your construction/rehab budget is likely going to be off, and on the low side. Also, if you're living in your first BRRRR then it should be a slam dunk...you get to live somewhere and get a masters degree in what it takes to invest in real estate. I'd also make sure that you're totally comfortable with all the monthly carrying costs based on your current income. Don't bite off more than you can chew on your first deal, it will likely leave a bad taste in your mouth. Hope this helps and good luck!

@Daniel Mendez exactly. I invest in existing rentals. So properties that haven't been fully flipped, but that have been updated enough to rent and I ask the seller to address all structural, safety and mechanical repairs that come up in the inspection period! So I'm starting with a house in a good condition, but not a house that's at top of the market retail value. In OKC this works very well based on how homes are priced and what rent rates are in C class. 

 Become an expert in marketing, construction, project management & sales.

A property is a property. At its core, there is no difference between a turnkey property & any other property. What you are trying to compare is apples to oranges. Successfully pulling off a BRRRR requires you to seek & find a distressed property from a distressed seller, buy it at a below market price, successfully rehab it at a cost that makes the property comparable to turnkey properties in the market but for an all in price that is below what these comparable turnkey properties are being sold for in an arm's length transactions. Turnkey companies do everything above & then sell you the property.

So it's not about the property. It's about you and your ability to pull off the BRRRR. You'll need to be good at marketing, rehab management, rehab estimation, an expert in the local market & a great team building. Can you successfully do all of that? Do you want to spend the time, energy, resources and take on the risk of trying to pull that off? If the answer is yes then go for it, your business will probably make some money. If the answer is no and you just want a passive way to park your money then you want to pay someone to do all of that for you, those people are turnkey providers. Think making your own dinner vs going to a 5-star restaurant, that's what we are really comparing here.