Is this a good idea for my first buy & hold?

Question

Looking for my first property and came across this. https://www.zillow.com/homedetails/1638-Douglas-St-Augusta-GA-30901/14957023_zpid

With seller financing it would be $2k down, $300 a month. Was thinking of putting a grand or two in it and renting for around $500. I’m in AZ but could fly out there to do the work and have a company out there manage it.

Is this wise?

I make about $4k a month after taxes and my bills are around $1500.

Derrick E. · Answer

This is the EXACT type of properties that I invest in. The only difference is that I invest in my local market so I know the streets, and I manage them myself. I also do most of the work myself or hire close friends/family to help me.

I'm not sure of that market or area. I would look for some rental comps in the area. I love that its a 3BR in that price range. Updated electrical is a good thing.

Hate that theres no central H/A in that price range and that one picture looks like a back section was added on to? Still, just from the pics it looks like a solid house and if it was in my local market, I would definitely go check it out at least.

You would be amazed at what paint/light fixtures/flooring can do for a place.

Derrick E. · Answer

I have found that my typical clients change based on street/neighborhood more than it does by the cost of my rent if that makes sense.

There are some streets that decent people just don't want to live, and I don't blame them. It doesn't have to be a nice street, but it can't be a war zone or sketchy during the day time lol.

I typically rent my units for a little below market rent. Reason being is this usually gives me more applicants to choose from. I also openly allow pets to responsible pet owners. This also gives me more tenants to choose from. I have learned that in these low income houses, most people will have pets anyways, unless you are keeping a close eye on the place, those people are not typically responsible pet owners.

You would be amazed at how many people are just appreciative of the fact they can get a clean/safe place to live and bring their pets with them.

My rents range from $441/month (HUD, already had tenant in place when I just purchased the house, will be raising it to at least $450 in 3 months when it's time to renew.)

My highest rent is $800/month that I could easily charge $825-850/month. I found a nice older lady (50's) who is single, has one daughter who lives at home with her while going to college (20 years old) and the 20 year old has a 1.5 year old son (tenants grand son.) The tenant has worked as a Teachers Aide for the same local school district for 12 years. She lived in her last place for 6 years until the grandson came along and she wanted a yard and such for the kid. Reason she was interested in my house from the get go is because I allow pets. She has a cat and it would have been a deal breaker for her.

I've had to go to the house twice since she moved in. Once cause they locked themselves out and once because the hot water tank went bad (I knew I should have replaced it up front, lesson learned lol.) I was so pleased with both of my visits (and she didnt know I was coming, you can't plan to lock yourself out or for the hot water to go bad.) The place was over the top spotless and taken care of to say the least. I know $800 isn't technically low income, but I only paid $30k for the house and did around $1100 worth of updates after I bought it.

So my rents range from $441-$800/month. One of the houses I just bought is actually a nice house, but I'm going to have to rent it on HUD. The location just screams like the type of place that would be aggravation to get rent from ppl. Then again, I only paid $7,000 for the house so I'm happy.

Matthew Parkhurst · Answer

With lower income housing what are your rental clients like? Any recommendations or tips with properties such as these?