Possible First RE Deal. Any Advice?
Let me start by saying I am brand new to real estate investing. I have been reading the forums here and listening to several podcasts and have recently joined my local REIA. I am extremely excited about my future possibilities in this field and completely replacing my 9-5.
My original plan was to start wholesaling and build enough cash to invest in buy and holds for long term investments and passive cash flow. I have started putting simple ads on Craigslist for the past 4 weeks and have gotten 4 calls from them. This last call has gotten me a little excited.
The property is in the Treme area of New Orleans. It is a SFR 4/2 1800 sqft in fair condition. The owner has the property free and clear. He has had SECTION 8 tenants in it for the past 2 years and has recently signed a new lease with a new tenant for $1350. He had the property listed on the MLS starting at 69,000 in May last year. He dropped the price to 52,000 in Oct. and withdrew it in November. I pulled some comps that have sold in the last 4 months and they are around 30,000-35,000. No wonder this house did not sell for 52,000.
For my feeble real estate mind this appears to be a really good deal. If I can get it at 35,000-40,000, it won't take long to recoup the money.
How will I get the money? I have a few family members that I am sure I can get to carry a note for me. Lets say I get it for 40k. A 10 year note at 10% would make the payments 528 a month leaving me with 822 a month to cover Insurance/Maintenance/Taxes.
Am I missing something here or is this a really good deal? Is Section 8 a lot of trouble to deal with. I have heard buy and holders in my area rave about Sect8 because of the guaranteed rent payments.
Help a first time investor out. Should I pass on trying to buy and hold this property and wholesale it or skip the wholesaling and start building my portfolio?