Looking at a possible first property wanting some advice

[Ryan Dossey]

I have a possible lead on a first investment property. My goal from the strategies I have been learning and studying is to build a cash flow portfolio that can eventually be sold as a whole.

The property is in a quiet area but definitely urban. I've drove the streets and it appears to be a good neighborhood. It is a 1bd 1bth with an unfinished basement, a room that was added on, a kitchen and a living room.

Comps in the area rent at $595.00

The home should appraise for around 24k.

It is owned out right. "Partner" of mine met the home owner and passed her my way.

IF I can get the property for around 12k that should get me instant equity (make your profit when you buy) and a mortgage (15 year) of around $117.00 a month including taxes/insurance.

Using the 50% "rule". The cashflow on the property should be right @ $181.00 a month.

It also passes the 2% "rule".

My exit strategy is either portfolio or try to get a lease option tenant. As a first purchase the ROI vs the risk is appealing. My concerns are that it's only a 1bd and that may make it hard to sell 5 years down the road as well as it being close to a rougher area. Obviously section 8 would always be an option with this property as well.

Thoughts of the BP community are greatly appreciated.

[Max Householder]

Especially near a rougher area I would want more options. A 2/1 or 3/1 would give you a wider variety of potential renters (couples, families, roommates, students, etc.) vs. needing to find 1 person by themselves. Also, there will be more people to market to if you decided to sell at some point due to the neighborhood. Even if you want to buy and hold, you should have multiple exit strategies.

We live in south city and our neighborhood is a mix of 1/1, 2/1, and 3/1. The 1/1 houses are either perpetually "for rent" or "for sale".