BiggerPockets

I'm currently under contract and there are several things I don't like about the place, but only grab it because inventory is hard to come by. This is a pocket listing I got from a realtor I work with.

1 Story Traditional Equity Sale.
1150sqft
3bed,2bath
Built 1983
Henderson, NV
Purchase Price $96k Cash
Rehab $6K
ARV $110k - $120k
Rental income $1000- $1100, (2% is hard to come by in Las Vegas.)
Walking distance from pretty good high school.

Things I don't really like about it.
- Small Kitchen
- Dining Room Table would be place in the kitchen corner which is only about 5ft x 10ft.
- Only standing shower in master bath, no tub.
- One sink in master bath.
- Normal sliding closet door in Master Bedroom.
- Electric Appliance, only water heater is gas.
- Garage is attach to the house, but you have to walk out the side door and get in the house via front door.

I could flip or rent, if I rent, I would get 9.5% Cash on Cash return, not including vacancies & repairs.

Monthly cashflow on rental would be between $855 - $955.

What do you think about this deal?

i just did the math with the 50% rule. your cash-on-cash return is 5.5%.

you would have some equity though so your net worth went up instantly.

If your cashflow numbers are accurate, renting would be the definite way to go. Since you paid cash, and there is not a ton of potential equity in the home, the cashflow will bring more income. Not to mention you are considering this a gem in your area, so you might as well hold onto it.

Thanks for the feedback @Phillip Dwyer!!!

1. Is the laundry located in the garage? - No, it's inside the house in the hallway area to the bedrooms.

2. What type of roofing does it have? Asphalt shingle doesn't seem to last as long here. - Tile Roofing, looks to be in good condition, but didn't really inspect it yet.

3. Make sure you're looking at the rent rates for the immediate subdivision. Parts of Henderson can change quick if you cross a street or rail line. - Yes, I looked on the MLS for the rental rates as well as Craigslist and Rentometer. $1000 is the low end.

Have you thought about flipping it right away and keeping the rehab money in your pocket? Since you have equity and you can probably list it higher than comp value and still sell it. Due to low inventory and high demand you can probably find a desperate buyer.

With AB284 being reconsidered right now and talks of it being amended there will likely be new inventory introduced to the market soon. This will soften the market. To what degree is open for debate. I don't think prices will drop but they might. If they do you could buy another property and probably get a better deal.

With that being said flipping it now may allow you to sell high and then buy low again.

You can read a thread about the competitiveness of the current market here: http://goo.gl/csgZg

If you want to hear about the possible softening of the market then read this link: http://goo.gl/RJvvl