I'm ready to buy my first rental property, but I would like some advise from people who have actually done it. I'm afraid that I will make a mistake due to lack of experience. I am wanting to use the BRRR method.
I can buy the house for 14,000. Despite the price, It’s not a ghetto neighborhood. I’m buying in my small midwestern home town with a population around 4K people.
It is liveable but needs some work. I have the cash to buy it and do basic rehab. I should be able to get $500 per month rent. I would then want to take out a mortgage on the property. After rehab I was thinking I could probably cash out refinance what I had spent on the property and purchase another similar property and repeat.
I don’t know how to begin figuring rehab cost. I walked through house the first time last night and it just seems like paint, flooring, doors and stuff like that. 850 sq ft, 2 bed, 1 bath, attached carport, nice yard.
Im guessing a mortgage payment around $300 per month with taxes and insurance, which would give me a $200 per month cash flow with very little out of pocket.
What am I missing. What do I need to know about buying a house with cash. Will it be difficult to get a mortgage on a rental property that is that cheap?
Any advice is appreciated.
Please post before and after pictures. A house for $14k that's livable?!
Understand your neighborhood/city and make sure $500/month rent is the market rent. I would try to pay for the property and not get a mortgage on it. I think it would be too difficult for that amount of a loan to get a mortgage on it.
For repairs, take into account how long it will take you to make them and what the materials will cost.
I don’t see how to post pictures from the app