Advice On First Rental Property

[Justin Pumpr]

Hey all,

I am in contract to buy my first rental property in Columbus, OH and I'm unsure if I should close, so would love some opinions from some seasoned investors. The property just about meets the 1% rule and will cash flow at about $150/month (which isn't my target of $200/door). The property is a single family. I'm paying cash and will do delayed financing, so all of my repairs cost will be in the deal. Even if I waited for the property to season, I'd still be leaving around $16,000 in the deal. 

Details are below:

Cash Purchase price:73,500

Repairs: $22,500

All in: $96,000

ARV: $95,000-100,000

Rental income:$900-950/month

My concern is mostly the amount of money I'm leaving in the deal and not gaining any equity when I refi. Are they worthy compromises for the first deal? I've been trying to buy my first property for almost a year now, as I've been trying to BRRRR multifamily and have struggled to find a property that I can get all my money back out on. I also had an awful flip which has made me very cautious about taking anything too risky on which has made it harder to find properties that will BRRRR. Part of my says this isn't a great deal, so don't do it, but part of me is saying to buy a property and get things moving.

What would you do?

ps. thank you as

[Remington Lyman]

Originally posted by @Justin Pumpr:

Hey all,

I am in contract to buy my first rental property in Columbus, OH and I'm unsure if I should close, so would love some opinions from some seasoned investors. The property just about meets the 1% rule and will cash flow at about $150/month (which isn't my target of $200/door). The property is a single family. I'm paying cash and will do delayed financing, so all of my repairs cost will be in the deal. Even if I waited for the property to season, I'd still be leaving around $16,000 in the deal. 

Details are below:

Cash Purchase price:73,500

Repairs: $22,500

All in: $96,000

ARV: $95,000-100,000

Rental income:$900-950/month

My concern is mostly the amount of money I'm leaving in the deal and not gaining any equity when I refi. Are they worthy compromises for the first deal? I've been trying to buy my first property for almost a year now, as I've been trying to BRRRR multifamily and have struggled to find a property that I can get all my money back out on. I also had an awful flip which has made me very cautious about taking anything too risky on which has made it harder to find properties that will BRRRR. Part of my says this isn't a great deal, so don't do it, but part of me is saying to buy a property and get things moving.

What would you do?

ps. thank you as

 In 3 years when you have a solid portfolio of properties, you are not going to be salty about your first buy. My first buy in Columbus, Ohio was terrible but it got me to where I am today.