Should I stay or Should I go..... Come On and Let Me Know
I have a high quality problem and am interested in some feedback from the BP community.
We bought an REO several months ago and just go the former owner out this week. The house is full of junk (typical FC) but other then needing 3-4k in paint and carpet it is ver sound (roof might be older but looks good for at least a few more years).
So here is our situation:
Bought the house for 12.5k,
Rehab 4k Max
Mechanicals good (other then older roof) Water heater is newer, furnace is decant vintage, actually has central air.
Rents are $1,000 a month
Resale price estimate list for 60k sell for 55k less closing costs.
So do we put this in rental mode with a PM and cash flow it or sell it and go see if we can find 2 more in it's place.
What rules and guidelines does everyone use to evaluate deals like this? Either way it is a home run but my partner and I had a long discussion about trying to come up with some kind of soft rule for deals like this, do we keep it if it meets the 4% rule, 3% rule, if gross rents would buy the house in x years its a keeper, if not sell? Other ideas?
Thanks for your input.