hello bp community,
im interested in my first buy and hold property that a wholesaler brought me. but i'm hesitating because im not sure if it's a good deal and what question i should ask.
it's townhouse 3b/1.5b 1006sqft was recently renovated within the last 3 months. there is a tenant in place that is current on rent $800. they are asking for $55k.
im interested in conventional loan which requires at least 20% down on rental property (=$11k) and i calculated vacancy rate of 10% (=$960 based off of $9,600 gross rent), as far as i know there is no repair needed, but i'll factor in 15% (=$1440), what type of monthly expenses should i factor in? and when should i request the lease agreement to read it over myself? any other question i'm missing?
thanks for the help
It can be helpful to quickly evaluate a deal by assuming a 20-50% operating expense, but I'd recommend getting more detailed. In addition to the expenses you mentioned, (mortgage, vacancy, repairs) consider:
Rental income tax (if applicable in your area)
Utility bills (unless tenant pays)
Property management (unless you'll do it yourself)
Advertising (when vacant)
Best of luck to you!
thank you @David Tomich i will keep those in mind on my next one, cause im hearing from other BP member its a lost cause
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