Thoughts on this property...

[Todd Bullinger]

Just wanted the opinions of people who knew more than I do. Here are some details on a potential deal. Owners aquired a larger house with the death of a grandmother and just looking to drop this house for what they owe.

Appraisal - $55,000 in 2005
Purchase price - $48,000 includes all closing costs
Private investor - $8000 @ 6% over 4 years
Mortgage - $40,000 @ 5.5% for 20 years
Monthly PITI - $550 for the first 4 years
Monthly PITI - $375 last 16 years (paid off initial $8K)
Rent - $625 and can be immediately rented

Currently have another property that has a positive cash flow of $225 and is also in pretty good shape and no anticipated major repairs.

I understand that there will be a lot of debt to this house initially. Previous owners took great care of the house, no repairs needed. Thoughts?

[Tammy R.]

Are you getting this with owner financing?

You mention the 2005 value, what is the value TODAY? 2005 and today are MUCH different.

It sounds like this will cashflow, however, as a pp stated, don't forget to add insurance costs, (liability and landlord insurance) (sounds like you accounted for that). Will you manage it yourself (if its a house, not units, you may want to consider this) and if not, what are management fees (all of them)? Are there any HOA dues or fees on the property?

I would work on the price, and do a FULL evaluation of ARV based on at least 4 comps (I prefer 10) in the area in the past 3 months, go back 6 if you have to. Try to keep comps in the same neighborhood, and/or within a mile of the property. Make sure to have the house inspected to find as many problems you can; houses can look nice and still need many costly repairs.

Check rentometer.com and see if there is an up potential in the rent.

Let us know what the current value is on this house and the repairs needed and if there is up potential in the rent. :)