Might've found FIRST INVESTMENT (comparing two opportunities)

12 Replies

Any comments, critiques, or recommendations welcome.

Despite not being active on BP for a bit, I have been hustling working two jobs (+ kids, military reserve, a demanding job of my own, and school) to save capital and continuing to read and listen to education. All that said, I may have my first deal.

It is a 2/1 SFH in Augusta, GA. 50kish but haven.t landed on a number. 1950 build. Bought on auction, rehabbed, and rented out since 2014. Seller is consolidating to clear some debt. Will need a new roof in 5 years or so (est. 3k). Should perform at $650/mo pretty easily and might be able to stretch a little more. Weird set up but I guess not all that uncommon in that area for older homes. Washing machine in the kitchen area and dryer out back. Prob a class C area.

My parents live South of Nashville where I can get a new construction 2/2.5 town home for 187k and get $1400 in rent in a class B+ area. Brand new product, less worries, higher caliber tenant, can have my parents be a point of contact (manage it), no yard to deal with, way more appreciation potential...........but smaller cap rate less cash flow. It wouldn't even meet the 1% rule.

Thanks for any comment.

I think it depends on your goals. The townhouse will be a negative cash flow property, so you are betting your money on appreciation and investing for the long haul. The $50k house will probably cashflow (not enough info to know for sure) and will have an immediate payout. This can be a short term or long term play. I'm investing for cashflow so my opinion would lean more towards the house over the townhome.
(267) 520-0454

@Jason DiClemente thank you for responding. PITI for the South of Nashville townhomes will land in the $1k-$11,00 area with HOA depending on options and which development. I’d cash flow about $300 if my parents managed it, less of not. But I’m paying about $40k to cash flow $300. COC/Cap rare isn’t great.

In Augusta if I 40 out 50k on a 30 yr amortization (I might go 20yr but we’ll see), PITI would be around $300 with no HOA (but higher cap ex). I might cash flow $300 after management but I’m only in it for 10k.

Total different product and approach I know...but I’m green and figuring it out :). Appreciate your input!

@Derek Okahashi i would not touch this with a ten foot pole even if I was starting out. That said I don’t know anything about your financial situation so this is why reason you don’t fish for advice on BP. If you are able to save more than 5-10k a year I would just save up six to twelve months more and get a higher priced property.

This is a d class and terrible resale. Think about it... it’s a 2 bed one bath. Who would ever want to purchase that as a starter home.

@Lane Kawaoka thanks for that. I could go for the Nashville townhome but do not have much left for another investment. Savings rate the next 16 months is tough because of two preschool age children but once one is in school and that 2nd income kicks back in, the 5-10k/yr will be happening. So, 2019-2020 before that savings rate kicks back in.

@Derek Okahashi where are you finding a new construction south of Nashville for 187k? My parents are looking at that price and that sound appealing. 

Originally posted by @Luka Milicevic :

@Derek Okahashi where are you finding a new construction south of Nashville for 187k? My parents are looking at that price and that sound appealing. 

In the Maury County part of Spring Hill off of Port Royal. Let me know if you move forward or want to chat further. I'm sure you know the market better than I do but I have been kind of watching it for a while.

@Ola Dantis thank you for the reply. I have been looking (sometimes actively sometimes casually) for over a year. This would actually be from a distant cousin who is a professional in the area. That said, we have a genuine family love and respect, but are not very close geographically or personally. I don't think he'd do me wrong but it is what it is. He actually said "If you want it I'll get it to you first. Not gonna say it's a great deal but it's an alright deal. You could do better if you lived here but you don't so it's an ok deal."

I appreciate @Lane Kawaoka 's comment about exit strategies though. (not so much about fishing for advice on BP though Lane, that's what this place is for and I appreciate yours). I have deeply rethought exit strategies though and will post if I decide to move forward. 

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