High closing costs! SFR to rent.

[Jane S.]

Estimated closing costs for a $450K SFR in good location, its in "ok" condition with 17 inspection faults. (There were 10 more but didnt ask seller to fix them, my handyman can do it.)

And closing costs are around $18000. Interest 5.875 with "buy down". (conventional)

Seller agreed to remedy 7 of the inspection objections but we asked for hard copy invoices and only got the one for the furnace maint.

I'm considering termination, since the local inventory keeps adding more SFR's in my price range $450K is the top and Im not sure I can cash flow it. Estimated total monthly payment is $1966 and most comps are renting in the $2100-2300 range. I have to admit my other rentals were acquired years ago and cash flow well. Taking on a risky property with $200-$300 month cash flow seems not smart. Your opinions mean a lot I do appreciate!

What do you think? I think I should look for a lower list price. Around $400-$425.

[Bruce Woodruff]

That's not enough positive cash flow to make it worth it for me. A bad month or bad tenant and you're upside down. Keep looking!