Newbie Inquiry for possible 1st deal
Hi everyone...I've been lurking on bp for awhile but currently own no rentals, only my principal residence. I see a potential opportunity in my future and since I'm always living in the "should of, could of, would of" thoughts, I'm trying to analyze this so I don't miss another opportunity. My in-laws are listing a rental property they own in so-cal (I live in nor cal) and are currently finishing up the renovations. It's a 3/2 Condo. They are listing for $540K but think they already have a potential buyer for $550k. I got to thinking, how come I can't buy it? Also, would it work as a rental? I was thinking of asking my inlaws if they would do seller financing and since we wouldn't use a realtor, we could buy it for less their commissions. I would offer $50k to them as a down payment. I used bp calculator and with those numbers, financing $460k @ 3% for 30 years collecting $2700/mo for rent, my cashflow is Negative $400/month. I don't know how much HOAs are so I calculated that in the numbers (assumed $300/mo per redfin). I also didn't include cap ex, vacancy and maintenance in the cost so really the cashflow would be even worse if I accounted for those. I did include 10% property management fees. The only reason I am still entertaining the idea is because of the seller financing. What suggestions would some of the more experienced people in the group have and how could or can I even make something like this work? Thanks in advance.