Should I Purchase
I have a tentative offer to pick up a property owner financed with a balloon due at the end of two years. After doing the numbers, including 10% for vacancy and 20% for repairs/maintenance, I forecast an cashflow of between $160-210/month. I would be more comfortable if I had a solid estimate of no less than $200.
I have done a bit of wholesaling. This is not my endgame and has only been my introduction to real estate. In fact, that is how I came across this property.
A couple problems:
1) This property is not in the best area of town. Although not a war zone, it would rent to "a lower class" of renters who stereotypically do not care for a property as perhaps those in a better area of town. So upkeep and maintenance, as well as turnover are a concern I have.
2) I have no capital and no reserve. Although the property needs very little to make it rentable, there are inevitably unexpected expenses, I am sure. Also, if things turn south from the beginning, I do not have the reserves to keep it afloat. I could afford the mortgage for a few months, but when you factor in any other expenses, I just don't know that I could do it.
Any suggestions?