Rental Property Investor · GA · Member since 2020 · 24 posts · 12 votes
Good Evening BP,
I currently have my first rental property under contract we are currently in the underwriting phase. The property is SF 3bed 2bath it was listed at 74,000 we offered 64,000 which is bottom line for the area the buyer took the offer. I got approve for a 68,000 FHA with 3.5% down payment for 30 yrs. After a year I plan to rent for 750 a month which is median for the area where rents usually go for 650-850. After expenses we would Cashflow close to 200 a month. I think it's a good deal the property values in the area are projected to appreciated around 7% this year. Any thoughts or advice or just feedback on how the deal looks?
Investor · Waco TX / Conroe, TX · Member since 2017 · 376 posts · 228 votes
5y
Without seeing a spreadsheet analysis its hard to give my best advice, but it seems you have it all mapped out from first glance.
I would just make sure you have your insurance included in the analysis and look out for those hidden costs.
For the first deal, I don't think its as important to be a grand slam. As long as you are getting after it and taking action, a base hit or walk is good in my book. The learning experience is where the real value will come from.
Investor · Fort Myers, FL · Member since 2015 · 292 posts · 278 votes
5y
Hey Dabvis,
You seem like a young guy with many years investing ahead of you. My biggest concern would be the market. I know very little about California, but I would be evaluating the sustainability of the market. Why are so many people leaving the state? Will that affect demand and rents? Do you have the income to withstand a drop in rents or periods of vacancy. If you are comfortable with these two things then I say go for it. I know way more investors that regret deals they didn't take down than ones that regret buying a deal. Good Luck.
Investor · Fort Myers, FL · Member since 2015 · 292 posts · 278 votes
5y
oh hey. I 'm investing in South Georgia. I'd grab $200 a door there all day long! You won't get the appreciation, but $200 a door can come cheap there.
Rental Property Investor · GA · Member since 2020 · 24 posts · 12 votes
5y
@Mike Terry I’ve been doing a little market research around the Valdosta area is set to uptrend around 7% on property value appreciation this year hopefully this is the case.
Investor · Huntington Beach, CA · Member since 2015 · 105 posts · 25 votes
5y
@Dabvis Le Sutton I hope you are INTENDING to move in upon close of escrow as a primary residence. Just saying... https://www.experian.com/blogs/ask-experian/heres-everything-you-need-to-know-about-the-risks-of-mortgage-fraud/
Investor · Raleigh, NC · Member since 2019 · 433 posts · 743 votes
5y
Just reiterating what someone else said - If you're intending to move into it and house hack, I'd say that's a great. But your PITI is probably in the low $400 or upper $300, then budgeting $150/month for maintenance and capex, and renting for $750, and then you're left with your $200 cash flow. But that's market rent for a full 3/2, not just a room you would househack with. If someone is just renting a room from you, while you live in the other parts of the house, I'd think you're probably going to get closer to $400 in rent and just breaking even. Which if you're living there, and you have to by law, then that's great.
If you’re not intending to live there, you might run into some trouble. But also if you’re not intending to live there and those are your numbers and all works out well, I’d say you’re $200/month cash Flow is solid.
Investor · Blackshear, GA · Member since 2017 · 13 posts · 7 votes
5y
Hey, I’m in South Georgia about an hour from Valdosta and that’s where i went to college. We shoot for $200 per door in my area. Like someone said above, probably not a ton of appreciation but great for cash flow. I think Valdosta would be a great market to be in with the university and also military base. Good luck!
Rental Property Investor · Atlanta, GA · Member since 2019 · 14 posts · 5 votes
5y
@Dabvis Le Sutton are you in the perimeter? Outside the perimeter? Are you close to the college? Away from the college? Have you thought about STR if you're in the downtown area? You can squeeze more out of this deal if you're smart about it
Investor · Waco TX / Conroe, TX · Member since 2017 · 376 posts · 228 votes
5y
Without seeing a spreadsheet analysis its hard to give my best advice, but it seems you have it all mapped out from first glance.
I would just make sure you have your insurance included in the analysis and look out for those hidden costs.
For the first deal, I don't think its as important to be a grand slam. As long as you are getting after it and taking action, a base hit or walk is good in my book. The learning experience is where the real value will come from.
Rental Property Investor · GA · Member since 2020 · 24 posts · 12 votes
5y
@Tucker Cummings I have a family so we take up space. After a year we’ll have a little equity and have it rent ready. Thanks for the advice and feedback
Lender · Southwest Georgia · Member since 2017 · 312 posts · 278 votes
5y
@Dabvis Le Sutton First let me congratulate you on a great deal on Financing!! I do a good bit of investing and financing in Valdosta and getting 30yr money is almost impossible since I'm not living in the home at all. Second, depending on the area in Valdosta your rent is low. If your home is in a decent area and you keep it up you can easily get 825-895 a month in rent. There is just not a lot of 3 bed 2 bath rental homes in the market that are nice. I have 5 that are 3/2's and when one goes vacant we have it filled in less than a week at 850-895.
So without knowing too much about where your deal is located, I would say that this will be great first deal.
Gainesville, GA · Member since 2021 · 5 posts · 0 votes
5y
@Dabvis Le Sutton
I'm new to REI but live in Georgia and am familiar with the Valdosta area. There is not much there at all, but if you were willing to rent to college students, I'm sure you could keep it rented out fairly easily at the price range you mentioned. Best of luck to you!
Lender · Southwest Georgia · Member since 2017 · 312 posts · 278 votes
5y
@Logan Hughes, I don’t know when the last time you were in Valdosta was but I would consider you taking a trip. That town has been a boomtown in South Ga the last 5 years. Really about the only growing market south of Macon. I travel there monthly and a new complex, or new business, or new subdivisions is getting put up regularly.