I would buy it also for roughly the same price (it will be in good condition but may require some small fixes for a tenant), but it's bigger and has an extra bedroom so it will rent for $1400.I could have also ran this model by assuming that I would get the same type of property as the turnkey, but for $125k and would rent for $1200 as the turnkey would.

Real estate just like stocks and other strategies requires intelligence and a plan.

Hi Dave,The topic is 2 years old which you might not have noticed.Closed at a 7 must have been urban core in a highly desirable area.I am seeing trade at a 9 here with no rent bumps in the primary term.For anyone wondering many tenants are credit tenants.There is a huge difference in that INVESTMENT GRADE tenants are BBB- or higher.The ones below that are considered junk status by many lenders which doesn't make them a bad investment just harder to get financing and more to put down.The dollar stores (there are 3 big brand companies nationally) with other smaller regional knock offs are okay as long as you are not buying in obscure rural locations.The fronts are usually brick facade and the sides are sheet metal.You second and third generational tenant will not have the same per sq ft sales they will leaving you with less of a re-rental return.Having said this I have seen some very nice all brick ones where the city required a certain architecture and look to approve the building permits and process.Those typically run 1 million in price to 1.2 versus the cheaper ones in rural areas at 500k to 800k.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

No cutsodians required. 

You should require the new person to apply, pass your screening, and sign the lease.

There are dozens of check boxes, some of them matter, and Balance Sheet and capital accounts are now required.

Most if not all of these properties require SIGNIFICANT cap ex rehabs and conventional financing won't touch them; you'd likely need to go the hard money route at 10-12%, 2 points, 12-18mon turn around.

Charge the tenant for all cleaning and repairs required to return the rental to these same condition as it was given, minus ordinary wear-and-tear.You can't charge full price for a replacement appliance, flooring, or even paint.

By leveraging our expertise in pricing and buyer demand, we identified a deal that required no renovations but still yielded solid returns.