First Time Investor/First Time Poster- Would you buy this property? Help!

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First Time Investor/First Time Poster- Would you buy this property? Help!

Anne Carlson
Member since 2021 · 7 posts · 1 vote

~This property is listed at $63,000.  

~It has 3 bedrooms, a garage, a full basement, and lots of living space (living room, dining room, large breezeway). It is outdated, which is the norm for rentals in our area. I would do some cosmetic updates.

~Rent for a 3-bedroom home with garage in this area is between $950-$1,000. 

~I'm in IL where property taxes are high. I can't find the taxes for this house anywhere, but they could be anywhere from $800-$1800. My realtor is looking into this for me. I know this is key info.

~Of course, I would love to get the price down if I make an offer.

I would so love and appreciate your thoughts. Thank you!    CLICK HERE TO SEE THE ZILLOW LISTING!

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Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y

After a quick search I found some really important information on this property. If I was newer investor I'd walk away from this deal. 

I work in the environmental field. You'll need flood insurance if you're taking out federally backed loans. It's expenses most of the time. Appreciation in a flood plain is near zero. Unless you plan on holding for life you'll struggle to resale as in the current case. It's been on market for 216 days for a reason. Best of luck. 

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Anne Carlson

    not enough info.  would need to know...

    -quality of neighborhood

    -exactly how much you would list it for rent

    -whether you have a property manager lined up to manage it for you

    -how you are purchasing it (cash vs. financing)

    -ALL monthly expenses

    -why it's been sitting for so long if the seller is 'motivated' - red flag - what does your agent think?

    don't buy something random you stumble on just to get your first property.....

    1Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y

    Thanks for the response! I truly appreciate it. I didn't stumble on the property. I've been stalking this small town market for years. I used to live and teach in this town. We have since moved one town over, but my husband still teaches and coaches there. I've been eyeing this property in particular for several months. It just dropped in price by $12,000. From my investigative skills, it appears that an elderly person has owned the home for many decades. I think the family is trying to unload it. I will see it in person tomorrow. Based on pictures, it looks like it has been well-cared for, just outdated. We'll find out for sure tomorrow. 

    Neighborhood- This home sits on the "outside" of a decent little neighborhood. In front of it runs a busy street with commercial businesses across the street (Dollar General, a pizza place, etc.). A few houses over sits a park with play equipment, followed by a couple government buildings. Behind and to the side of this home are residential neighborhoods. Some homes are in bad shape, others are well-cared for. That's pretty much the case throughout the entire town though.

    Rent- $950

    No property manager (just me and my husband)

    30 year fixed mortgage

    I have no idea what the monthly expenses will be. This would be my first purchase. We would probably pay someone to mow the grass. 

    0Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y
    Quote from @Nicholas L.:

    @Anne Carlson

    not enough info.  would need to know...

    -quality of neighborhood

    -exactly how much you would list it for rent

    -whether you have a property manager lined up to manage it for you

    -how you are purchasing it (cash vs. financing)

    -ALL monthly expenses

    -why it's been sitting for so long if the seller is 'motivated' - red flag - what does your agent think?

    don't buy something random you stumble on just to get your first property.....

    Thanks for the response! I truly appreciate it. I didn't stumble on the property. I've been stalking this small town market for years. I used to live and teach in this town. We have since moved one town over, but my husband still teaches and coaches there. I've been eyeing this property in particular for several months. It just dropped in price by $12,000. From my investigative skills, it appears that an elderly person has owned the home for many decades. I think the family is trying to unload it. I will see it in person tomorrow. Based on pictures, it looks like it has been well-cared for, just outdated. We'll find out for sure tomorrow.


    Neighborhood- This home sits on the "outside" of a decent little neighborhood. In front of it runs a busy street with commercial businesses across the street (Dollar General, a pizza place, etc.). A few houses over sits a park with play equipment, followed by a couple government buildings. Behind and to the side of this home are residential neighborhoods. Some homes are in bad shape, others are well-cared for. That's pretty much the case throughout the entire town though.

    Rent- $950

    No property manager (just me and my husband)

    30 year fixed mortgage

    I have no idea what the monthly expenses will be. This would be my first purchase. We would probably pay someone to mow the grass.


    0Reply
  • Brett Deas
    CO · Member since 2022 · 588 posts · 426 votes
    3y

    If this will be your first property I say do it, jump right in. Everybody makes mistakes on their first deals and learns so much for the future. Make sure it fits with the lifestyle you want however, whether that is cashflow or retirement plan, only do things and buy places that align with your goals. 

    0Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y
    Quote from @Brett Deas:

    If this will be your first property I say do it, jump right in. Everybody makes mistakes on their first deals and learns so much for the future. Make sure it fits with the lifestyle you want however, whether that is cashflow or retirement plan, only do things and buy places that align with your goals. 


     Thanks, Brett! 

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Anne Carlson

    OK!  good you know the town then.

    but you should not buy something if you have no idea what the expenses will be!

    i don't know this market at all but i suspect this house will not cash flow.  i ran some super, super rough numbers and got $900 in expenses.  if anything is off just update it.

    you should always run your numbers with management in case you ever need it.

    Mortgage $300
    Taxes $150
    Insurance $50
    PM $100
    Vacancy $48
    Repairs $50
    Capex $100
    Grass $100
    Total $898
    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Anne Carlson:

    I'm not going to do the math for you. Based on what you've shared, it's worth investigating further.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    0Reply
  • Jake Handler
    Real Estate Agent · Morristown, NJ · Member since 2020 · 206 posts · 128 votes
    3y

    I'm just laughing that you think property taxes between $800-$1800 a year is high.  That's the cost of thinking about property taxes in my area lol.  Seems like this deal pencils out for you... you got this Anne!

    0Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y

    After a quick search I found some really important information on this property. If I was newer investor I'd walk away from this deal. 

    I work in the environmental field. You'll need flood insurance if you're taking out federally backed loans. It's expenses most of the time. Appreciation in a flood plain is near zero. Unless you plan on holding for life you'll struggle to resale as in the current case. It's been on market for 216 days for a reason. Best of luck. 

    3Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y
    Quote from @Jake Handler:

    I'm just laughing that you think property taxes between $800-$1800 a year is high.  That's the cost of thinking about property taxes in my area lol.  Seems like this deal pencils out for you... you got this Anne!


     Lol. I guess I thought it was high for a $60,000 house. My realtor just updated me that she anticipates they would be closer to $2,000-2,500. I live in Illinois, and my own house costs my nearly $10,000 in property taxes. 

    0Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y
    Quote from @Jaron Walling:

    After a quick search I found some really important information on this property. If I was newer investor I'd walk away from this deal. 

    I work in the environmental field. You'll need flood insurance if you're taking out federally backed loans. It's expenses most of the time. Appreciation in a flood plain is near zero. Unless you plan on holding for life you'll struggle to resale as in the current case. It's been on market for 216 days for a reason. Best of luck. 


     Thank you so much for sharing that! I appreciate it.

    1Reply
  • Anne Carlson
    OP
    Member since 2021 · 7 posts · 1 vote
    3y
    Quote from @Nicholas L.:

    @Anne Carlson

    OK!  good you know the town then.

    but you should not buy something if you have no idea what the expenses will be!

    i don't know this market at all but i suspect this house will not cash flow.  i ran some super, super rough numbers and got $900 in expenses.  if anything is off just update it.

    you should always run your numbers with management in case you ever need it.

    Mortgage $300
    Taxes $150
    Insurance $50
    PM $100
    Vacancy $48
    Repairs $50
    Capex $100
    Grass $100
    Total $898

     Thank you! I've used some online calculators, but I still wasn't sure what to think. It's helpful to hear from someone in this field. I appreciate you taking the time to do that for me.

    0Reply
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