Advise on first rental purchase

[Rohit Vij]

Hello BP,

I am writing an offer for my first rental SFR purchase at Houston and would love to hear your thoughts on it.

It needs new carpet and paint, I am estimating 7k for that. Cash on cash is not great (only 5%), but looking at the market, that's the best deal I have seen in last 2-3 months.

See detailed calculation here: https://www.biggerpockets.com/calculators/shared/3...

What are your thoughts? Should I take the plunge or keep looking?

Thanks,

Rohit

[Jess Hewitt]

For buy and hold properties I want to make at least $200/month after all expenses.  I think you taxes are high as I see 3.5%.  Hire a tax protest company on day 1 and get them the condition report so they can protest taxes.  You may also be able to save a lot of money by choosing your paint and carpet guys.   Try to stay under $2/sq ft for each, carpet and paint.  You have $135/month for maintenance and capex, I would buy a Home Warranty at about $60 per month and take out the capex as they will replace any major systems.

I think you have a good deal here.  You are using a lot of cash but if you have the opportunity to refinance as the market value creeps up then you can get some cash out at a later date.