Need input on this property. Go for it?

[Bryan Clark]

First post on BP! Looking help deciding on my 1st deal. 3bed/2bath 2 story Home is older in an Indiana rural community.  Built in early 1900s but have had all updates and well taken care of.  Nothing but minimal cosmetics needed.  Previous homeowners converted detached garage into 1 bedroom apartment/building that is currently being rented @$400/mo. It’s zoned as a single family home now. Main home should pull in $800/mo due to other rentals/apartment pricing in area. Home location has nice exposure. Sale Price: $100,000 (realtor thinks appraises around $115k)....20% down ($1,900 closing costs)....$80,000 mortgage....$450/mo payment Annual Income: $14,400 Taxes (at max) is $2,000/yr.....Insurance is $800/yr.....$1,200/yr reserve for repairs Net income: $5,000/yr Should I go for it? Thanks!

[Joshua Rouse]

I don't have much experience so my word might not be worth much but have you heard of the 1% rule? It's a good general rule-of-thumb that an investment property will have positive cash flow if it rents at 1% of the total cost to buy the house. This means that if you are able to rent out both apartments and receive $1,200 per month, it should cash-flow positively. However, due to zoning it may be difficult to rent out both apartments. Also with it being an old house, you may get into some difficult situations with maintenance. Lastly, if it is already updated and in rural Indiana, there is a good chance that you won't get much appreciation on it anytime soon.

If I were in your position, I would keep looking. If you've not heard of the BRRRR strategy, I would look into that. You won't see much cash-flow from a single family home so appreciation is key.