Approaching First Rental Purchase
Hello BiggerPockets,
My name is Jeremy, I am from the Pittsburgh, Pa. Area. The following post will be in regards to a property that I have analyzed for purchase and feedback would be greatly appreciated.
The house: Asking Price: $54,900---- 768 Sq ft/ 1bed/2 bath, New furnace, hot water tank, new kitchen appliances, newer washer and dryer, newer roof, newer AC unit, anticipating no major expenses within the next year
Link to house-http://www.realtor.com/realestateandhomes-detail/4127-Lebanon-Church-Rd_West-Mifflin_PA_15122_M32818-38813
The Plan of action: The current owner is in a rush to sell,(friends of the family) most likely will sell for mid 40s, Place and offer for 40K hoping to settle for house between 45k-50k including all closing cost.
Area- Average house rents for $650-$850 for 2bed 1 bath. I will be updating the current basement into a master suit with updated bathroom.Which would put me into the $750s for rent. The current area has good location for city workers/ local business.
Estimated rehab cost 10K. I have ran the 50% rule with this property after the remodel and the numbers are as follows:
Purchase price $60,000(including remodel)
20% Down-$12,000
Rent- $750
Mortgage-not including taxes and insurance- $260/month
Approx insurance yearly: $800/12=$70
Approx Taxes yearly: $1900/12=$160
Total monthly Expenses: $260+$70+$160=$490
$750 rent - $490= $260
$260 x 12 months= $3,120 / $12,000 Down payment= 26% return in one year with no problems/ maintenance.... Even if you cut this in half I feel at $130 cash-flow a month for this property is good. If you look in the link the pictures are helpful determining the house. Beautiful backyard, shed, new driveway.
If you could provide and tips/ feed back, it would be very helpful.
Thanks,
Jeremy