Quote from @Caroline Landreth:
Pros/Cons to the following scenario. Say you have $900k to invest would you prefer .....
A) Invest in x3 $300k houses that are turn key ready to rent (have already been nicely Reno'd so no capital expenditures needed in near future) and are in desirable locations so that the property will appreciate more over time
B) Invest in x4-5 $150-250k houses in less desirable areas that are also turnkey
C) Same as B but need to be rehabbed
Depends on your capabilities, skills, time availability and resources at hand.
For example, let's say your a GC or Project Manager in the trades by day profession, readily knowing how to manage a construction site, with all the connections for labor and material supply, in that one is going to benefit from doing the reno themselves most likely.
(B) is a no-go plan regardless. A poor performing market is a descending market in the vast majority of cases. Remember this is INVESTING and with that our lens of focus is measured in years and decades not months. A poor performing market brings additional issues novices rarely think upon such as lack of vendors to service such area, lower tenant quality, higher instance of tenant damages, higher instance of tenant defaults, evictions etc. all driving up cost of operations.
Thing to keep in mind is APPRECIATION CREATES CASH-FLOW. Under (A) what the "big ugly"? Most often the worst thing a person can say is low cash-flow. Ok, but if it's an appreciating area/market that means your cash-flow is GROWING every year, right. So it's NOT a "bad" cash-flowing property, it's simply one requiring PATIENCE for it to "bloom" into a cash-cow, right.
THAT is investing, by the very definition of investing, is it not?
APPRECIATION is hands-down without doubt THE #1 MOST important component. Why? Because regardless of property or area your expenses WILL without doubt go UP year after year after year. If your NOT appreciating, that means your in a nightmarish scenario where operational expenses are out-pacing revenues and it's only a matter of time as those growing operational expenses cannibalize your cash-flow into oblivion, and into the red.
"Guru's" whom I won't name that focus on fancy BS tag-lines to sell memberships conveniently skip this entire force factor. Are they unaware of it, or just not fully informing people because it doesn't "sell the dream" IDK, and honestly I don't care, there just pumping sunshine up tail-pipes.
