Birmingham ‘Turnkey’ Rental

Sometimes you have to get a bad one out of the way early.
Buy and hold

About the Property


About the Deal

Why I liked it

High rent-to-price ratio and it was in my budget! It was twice the size as my primary house at the time in Virginia, but was less than a quarter of the cost. Buying it as a turnkey felt much less risky being a newb investor.

Deal structure

Purchased in my own name with a conventional mortgage and using my own savings for a 20% down payment.

Deal outcome

The property was far from a turnkey. I closed in September and didn’t have a tenant until February, and when it did get leased it was $50/month less than advertised. I did not get any sort of warranty or guarantee from the provider but after months of haggling they did reimburse me for my mortgage payments during the time it was unrented.

There have been several maintenance requests due to the poor work in the renovation and I decided to sell it and take a loss to get a chunk of money back that I could turn into a more profitable investment elsewhere.

Projected Numbers

Purchase: $96,000
Rent: $950
Year 1 Cashflow: $2,100
Year 1 Cash on Cash: 9.5%

Actual numbers

Purchase: $96,000
Cash Outlay: $23,000
Rent: $900
Year 1 Cash Flow: -$5,116
Year 1 Cash on Cash: -9.2%

Deal Outcome


Lessons Learned

1. Trust your gut!! If it feels like someone is being shady then they probably are.

2. Get it in writing.

3. If you’re paying someone to do a job, you should feel no shame demanding they actually do the job.

4. Home inspectors are your friend.

5. Pull your weeds and water your flowers.