Please Help...Decision to buy 2 Rentals
Greetings,
I could really Use the communities help. I have decided to focus on buying and holding. I have two rentals that bring in great cash flow but are both houses I have lived in.
My buddy and great real estate agent brought me two condos that a military friend of his is trying to sell bc of having to move. Here are the details:
They are both 3/2 condos that he bought over a year ago. The pro/con is he did all the work and did it FIRST CLASS. They are no others as nice which means I am buying at top dollar and this is a higher foreclosure area (don't love), but the numbers seem to make sense.
Here are the numbers:
Condo 1: 3/2, $93K purchase price. the last year he got $1400/month on a 1 year lease with a military family (bid up from $1200 bc of how nice this condo is and how many families wanted it). Most likely will get $1200 minimum (up to $1400). There are so many families lining up to come see it again. Cash Flow after 20% of my own money is $367 (based on $1200/month).
Condo 2: 3/2, $55K purchase price. Same renter for the last 2 years (nurse). She wants to extend her lease for $965/month. Positive Cash Flow is right at $250. (both are less debt service, HOA"s, property mgmt, reserves, taxes, insurance, etc)
Cash Flow/numbers on both seem to make complete sense. Cash on Cash is 25% ($29,600 down payment, $7400 yearly cash flow) I am getting 1.5% of rents vs. purchase price ($2165 rents and $148K purchase for both). My concern is that not only am I buying the 'top' priced condos in these areas, most of the other condos are in the high 70's or low 80's with high foreclosure. Any feedback or thots would be much appreciated. I have too move fast.