BiggerPockets

I'm getting out of the rental business with my one sole rental house :cool:
We've had enough with dealing with tenants and just dont need the headache anymore. Plus we moved to florida, and dont like dealing with something we cannot see.
I want to know if this is an attractive price for our property.
It is located just outside Charlotte NC and is a 3/1, 1000 sq ft home that currently has a section 8 renter in it paying 575/mo.
I paid 38K for it 5 years ago, and my mortage with insurance/taxes total is 400 bucks.
The house was built in the fifties, but maintenance has not been an issue, aside from tenants flushing diapers down the toilet :roll:
I have it for sell for 45, but we will take what we paid for it at 38. Thought I'd give us some bargaining room.
Everything meets section 8 inspection, which is pretty stringent in this area. House is really in great shape. We have put way more money into this house than we will ever make back...(well, maybe in ten years :oops: )
Brand new carpet, brand new double pane low E windows, doors, etc..Most of the wiring and plumbing is even new.

Is this a great deal for a real estate investor? Do the numbers add up favorably for a wise investor?

Based on YOUR purchase price of $38k, your PITI is $400 monthly. Now add in a vacancy factor, repairs/maintenance, property management, and you end up with no cash flow. Sell it to another investor for even more and they have negative cash flow.

Most likely will not get any action from an investor on this one. Perhaps you could get rid of tenant and retail it for $45 or so and cash out.

Mike, would you please post one of your typical 40K deals with a net cash flow of $750 to $850 per mo. Where are these located? Jim

Hey Mike, you still there?
I'm looking in colorado and not seeing all that much with the kind of numbers you posted.
Can you post a link?

That would be quite a good deal.

To say the least!!!!!!
Why would you require $737 of cash flow? $100 per door is acceptable so you don't need that much rent to make this work. Bottom line is, you have a set rent price and it can not be changed dramatically enough to make this a good investment so I stand behind my origianl suggestion to sell and try and at least pocket a little cash, if not brake even and move on.

Originally posted by Mike Macey

We sell $40k homes with $750-$850 net cash flow with an 80% LTV.

Does that "net" cash flow account for debt service, vacancies, property management, and maintenance (or any expenses at all)? I've never seen a 40K home generate that much cashflow. If you can show me that this is for real, I will buy 5 of them from you today.

hummm.....Mike must be currently out of these "deals" :roll: Jim

Judging from where mike was from (colorado) might I suggest that the cash flow was for the winter months only, which is now past and he is into the vacancy cash flow now.

High rents, high season, vacancy rest of year.

Originally posted by Mr_Investor

Originally posted by Jon Holdman

I was only going off what Mike wrote:

We sell $40k homes with $750-$850 net cash flow with an 80% LTV.

Needless to say, I'm not holding out for a deal that would give me $750 in cash flow.

I'm curious as to why?

Because such deals don't exist. I mean a $40K home that will generate $750 in true cash flow. You can probably find an apartment building that would generate that much cash flow, and if I could do a deal like that, I would. I just don't think its possible to do that with an SFR.

Yeah, me too. In fact, I'll take 10.