Found a local deal on MLS. Had been on the market for 3 months. Low-balled and they came down a ton and we now have a contract (still in option period) for $79,500.
$20k down (dp + closing costs) + $4k in repairs/etc to get rent-able. $700/month expenses for 30-year note before any maintenance/vacancy/etc. is accounted for. I think rent will be $900-$950.
House was built in 1980, is in a safe area with good school district, but it's a small town between two larger towns that has lower demand (but also very few rentals available and they tend to go quick). House has a new ac, furnace, water heater, roof, and was just leveled (pier & beam).
Would that amount of cash flow be worth it for starting out? Assuming $50/month for maintenance, CoC return is 3% for a 20-year note and 7% for a 30-year note.
Hang on or walk away? The market here is crazy hot and there just aren't many deals to be had...
Forgot to mention - my other big concern is that the $25k will basically wipe out our available cash for the foreseeable future. Our only option to buy anything else soon would be a 401k loan, which is somewhat limiting. We make good money, so we could build back up again, but it would take time.
Our goal is passive income long term (20-ish years) to replace income from our jobs so we're not working til 65 (we're 33 and 34 now).