So i just started house hunting with my mentor/agent/ and yesterday found a duplex five minutes from my house.

At first i wanted to find a house i could pay all cash for (only up to 50k) so i could do the BRRRR thing. But this would require a mortgage. Here are the details, its listed at $95k, it is occupied, from photos and driveby it seems extremely well maintained, its on almost an acre lot on a dead end street, its rents for $1300 total, its in a good school district, kind of a lower middle class neighborhood. i did a rental property calculator app i have called deal check, it says 7.8% cap rate, cash on cash 11.5%, $200 cash flow (after 50%off and mortgage) worst case scenario i could pay the mortgage out of pocket. which makes me less nervous for my first property.

my biggest concern is the house is probably right around market value and the rents too. Also, there doesnt really seem to be a value add opportunity. it's not a BRRRR scenario. SO how do i get from here to the next deal. I have 50k right now to get started, so i will probably use 25k for down payment and closing etc. then ill have 25k left to keep going. i dont earn a huge amount of money so even if i save aggressively that would be only 500-700 a month at most.

so is this a good property to start with? my mentor (an investor much younger than me who has about 18 units she manages and works full time as an appraiser) thinks its a great first buy. but im looking down the road at how to keep the snowball rolling. i would appreciate any feedback or advice. thanks so much!

If by having "no value add" you mean it is recently renovated, then it could be a good first rental. Lower maintenance makes things easier, and getting a little cashflow doesnt hurt. You'll still need to do your due diligence.... crunch real numbers, get copies of the property's schedule "e" to see what the real numbers are. Get copies of leases to make sure they are up to par, etc.... Remember, cashflow is only part of the game. Even with little appreciation, your tenants are still helping you build equity and you get tax advantages with the property. Good luck!

Thanks so much Jason! I think the kitchen is recently renovated on one side and the added a bedroom in the attic and finished basement. I might look at it tomorrow. It just looks very nice and well kept and clean and bright etc. all the grass is cut, big yard. It doesn’t seem there’s much to improve and that wouldn’t probably justify much of a rent increase. I didn’t think I’d want to inherit tenants but they seem to be taking good care inside and out. So in that way it seems like a perfect situation, and it’s so close to home. Thank you for telling me about the schedule e, I hadn’t heard that before. 

@Laura Srocki

It seems like the deal you have is a good 1st deal as it cash flows and it gets you the experience. Plus, you have a solid down payment going into the deal.

Regarding subsequent deals, my favorite episode is Episode 113 with Jay Papasan. He just laid out his process of saving down payments. Slow and steady. About 1 house (duplex I believe) every two years. Really great episode for long term vision.

Also, I would strongly reiterate @Jason D. 's  comment to obtain a Schedule E, leases and canceled checks to verify reported rental income. If these can’t be obtained it would suggest some serious red flags.

Let us know how it goes!