Lipstick on a pig, right?

(basically a new building almost) and then a tenant screened very heavily with additional security deposits.I would venture to say most of these "turn key" properties they put lipstick on it and then put a marginal renter in there.Then all of a sudden you have a no pay to slow pay tenant,damage to the property,mechanicals start to fail,and oh yes you are states away depending on an individual to protect your investment.Usually the turn key properties are built on the cashflow and have little appreciation compared to other properties.If you were to buy such properties the company should offer a turn key "guarantee".Example: Buy this property from us and if it's not everything we said it was going to be we will buy it back from you at the price you purchased it for within a year from your purchase date.If the turn key company is selling crap they won't stand behind what they sell.

Put the lipstick on one of them, but leave the other to resemble what's typical for the area.

Some people call it fluff 'n stuff, lipstick on a pig, or they oversimplify and just say 'paint and carpet'.When I refer to a property as a paint and carpet house, I'm usually saying that there's nothing note-worthy/major that needs to addressed with structural (foundation, roof, windows, etc), siding, mechanical (HVAC), electrical, or plumbing.

Lot's of flips and lipstick right now and when the down curve happens again lot's of owners will be feeling the pain.I have lived in GA all of my life and I do not believe in some of those areas long term for investment success.Lot's of old houses in Fulton county Atlanta where they make them look pretty on the outside and interior but behind the  walls, above the ceilings, beneath the floors is an epic mess.  

You can put lipstick on that pig all day long, my friend - it is what it is...I wouldn't use my license to sell this crap to anyone.  

This was not a lipstick project by any stretch. 

We ran the numbers on a nifty estimation spreadsheet I built: Purchase Details Financing Details Purchase Price $ 90,000.00 % Down 25% Esitmated Closing Costs $ 1,000.00 Down Payment $ $ 22,500.00 Estimated Repairs $ 33,984.00 Loan Amount $ 67,500.00 After Repair Value (ARV) $ 145,000.00 Loan Points 0 Total Project Cost $ 124,984.00 Loan Fees $ - Potential Upside $ 20,016.00 Amortized Over (Years) 30 Interest Rate 4.75% Total # of Payments 360 Monthly P&I $352.11 Total Cash Needed to Close $ 57,484.00 Cash Flow Details Income Future Assumptions Unit 1 Monthly Rent $ 850.00 Annual Income Growth 2% Unit 2 Monthly Rent $ 850.00 Annual Prop Value Growth 2% Unit 3 Monthly Rent $ - Annual Expense Growth 2% Unit 4 Monthly Rent $ - Sales Expenses 7% Additional Revenue $ - Total Monthly Revenue $ 1,700.00 Expenses Expense Forecasts Insurance / Month $ 100.00 Vacancy Rate (%) 5% Monthly Taxes $ 91.50 Maintenance (%) 10% Water/Sewer $ 69.70 Cap Ex Savings (%) 10% Waste Removal $ 57.08 Property Management (%) 10% HOAs $ - Vacancy Rate ($) $ 85.00 Electricity $ - Maintenance ($) $ 170.00 Other Monthly Expenses $ 50.00 Cap Ex Savings ($) $ 170.00 Description of Other: Lawn Mowing Property Management ($) $ 170.00 Total Operating Expenses $ 963.28 Net Operating Income (NOI): $ 736.72 Total Monthly Expenses: $ 1,315.39 Monthly Cash Flow: $ 384.61 Summary Monthly Income $ 1,700.00 Monthly Expenses $ 1,315.39 Monthly Cash Flow $ 384.61 Annual NOI $ 8,840.64 Purchase Cap Rate 9.82% Pro Forma Cap Rate 6.10% Total Cash Needed $ 57,484.00 Cash on Cash ROI 8.03% Rules of Thumb Total Monthly Cash Flow using 50% Rule $ 497.89 1% Rule (Revenue >1% of purchase price) Pass 2% Rule (Revenue >1% of purchase price) Fail Monthly Revenue as % of Purchase Price 1.89% Note – numbers above assume refinancing, maintaining 25% equity.It was immediately apparent upon walking into the unoccupied unit that the “recent renovations” were simply some lipstick trying to cover a pig in hopes we wouldn’t see.

Make sure you aren't getting a product that resembles lipstick on a pig.  

IF she stays great if she gives notice to go do the lipstick reno and find a new tenant at $1650.