Buying turnkey rental close to market value? Crazy or no?

[Vic Vega]

Hey Guys and Gals!

So I'm looking to purchase my first piece of investment real estate. Originally I wanted to flip but now becoming more interested in buy hold rent. I typically only look at distressed foreclosed properties. However, I've come across a home that is a standard sale. It's been moderately updated, nothing super fancy just clean and good shape ready to rent immediately.

Asking price is $104.9k which just about market value maybe a few thousand bucks under at most. I'd prefer to get it at $94.9 - $99.9k. The numbers (to me) make complete sense still.

Say I get it at $99.9k, put 20% down so $20k out of pocket to get in there. Mortgage would be around $650 give or take and should rent between $1,250-1,350. Generating $600-700 monthly cashflow. Given all that the cap rate math certainly makes sense. 

I just have a hard time getting over buying a investment property so close to market value. Granted it is in very good shape and a turn key rental though. Should I be concerned?

[Mike D'Arrigo]

@Vic Vega It's only crazy if you have the time, desire, knowledge and skill to put teams together and manage a rehab yourself. Another big consideration is whether you are local. It's very difficult to manage a rehab remotely. A lot of people are too busy with work, family and life in general to do it themselves. For them, turn key is the only way they can realistically get in to real estate investing. So, it all depends on your situation and your goals.