First Investment - Low Risk Low Cash Flow - Need Advice
First Time Investment Property:
Hey Bigger Pockets,
I bought a 2 bed 1 bath 2nd floor Condo in the DeMun area of Clayton, MO (Just outside St. Louis City) paid $210,000 for it. Probably paid 5-10K above mkt value, but I love this area and was willing to pay.
Owner in the unit below mine (also 2 bed 1 bath) is moving - needs to sell by April - has not put it on the market yet.
His unit has a more updated bathroom than mine, but otherwise, a very similar property.
I could likely get his for $200,000 or less due to no realtor fees.
Looking at:
$200,000 purchase price
Fully updated (which kinda sucks)
Likely get $1650/MO in rent.
20% down
P&I + Taxes + Insurance + $250 HOA = $1300/MO Which leaves me with $350/mo in cash flow.
I see there being very little maintenance/repairs because I have had little to no trouble with the unit I own.
Area is upper middle class - has the best public schools in the St. louis metro area (many families rent here because they cant afford the homes and want to send kids to nice schools) Walking distance to Washington University - prestigious private university.
It is a very popular area and will likely sell pretty quickly, but I have a chance at buying before it goes on the market.
I also know the building very well - New roof 5 years ago. brand new back deck put on 2 years ago - all around very well taken care of.
I know I do not hit the 1% rule, or really any of the standard metrics, but it seems like a very low risk investment due to high occupancy rates, and higher class tenants.
Also, it will likely appreciate in market value at a greater than average pace.
Do you think this is a good deal? or should I back off until I find something with more cash flow potential?
I appreciate any advice.
- Joe