Depends on the size of the portfolio you intend to build, whether you have lots of capital now or will be buying slowly and steadily (like me), the mix of property types (multi-family vs single family), and your financial goals and exit strategy (pure cash flow versus balanced cash flow and appreciation).
Generally, diversification is good. If you can diversify across markets, providers, and property types, you can reduce risk.
But there are downsides too. More overhead in the form of tax filings in multiple states and managing multiple property managers. More cash outlay on airfare and hotels for market visits.
My goal is to own 15-20 single-family homes priced between $130-200k (70-100% of median home value in their markets) and renting for 0.8-1%, by 2025. I'd substitute some local multi-families if I could find a way in, but the cost of entry is much higher.
I intend to work with a maximum of 3 turnkey providers in 3 markets (preferably 2 providers in 2 markets).
I started last year with 2 single family homes in the same market with one turnkey provider.
If the first year had gone totally smoothly, I would have purchased 2 more from the same provider this year, then pursued a second market and provider for the next 4.
Since the first year has been a bit choppy, I am banking cash and looking for either 2 more SFRs in a different market or a local multi-family property (much higher price points and very low cap rates, but great long-term appreciation).
Based on my early experience, I'm again taking my time doing a ton of diligence on markets, turnkey providers (including my current provider), neighborhoods, and properties.
In some of my favored markets, I may go the investor-friendly realtor route this time.
Locally, we are touring 1-2 properties a week, and I may start marketing locally too.
Anyway, I share all the detail because I have a plan on paper, but I am not convinced even "turnkey" is as simple as picking a partner and handing over the cash.
