I think I have a deal. Help!

[Willie R.]

I found about a possible deal through a real estate agent at an open house. I went to look at the property today. Its a 4/2.5 and its already a rental property. They are asking 125K for it prior to listing it, but believe that they can put it on the market for 139K. Rents in the area are about $1,500 per month but the current rent is $1,200 and the renter is being evicted. The agent told me that most deals of this type can be handled without a lawyer by using the title company. What are the risks of not using a lawyer and relying on title insurance for protection for a deal of this type?

[Lance Wakefield]

What area is your deal in? From what I see in DFW hitting the 2% rule on SFH's is not so easy anymore. If I am wrong about that and someone has one I would love to buy it! Here are the numbers I am seeing though on a monthly basis

Income $1400

Debt service (assuming $0 down) $618

Taxes $250

Vacancy  $117 

Lawn care $50

Misc $84 (I am not sure what misc is referring to but ill leave it on there for you.)

Cap X $114

Management $114

Maintenance $114

insurance $114

Monthly GOI = $1400

Monthly expenses= $1689

Monthly cash flow= $(289)

Feel free to adjust these numbers and repost if I missed something or was higher or lower than what you believe it would be for this particular property.