Newbies, let's analyze some local deals and make it interesting.

[Vijaianand Thirunageswaram]

Hello New Investors,

I know many people get stuck in the analyzes paralysis mode and never move forward. One of the big mental pressure among new investors is, whether I did the right thing to pick up this deal or missed it out. So I thought Iet me share some of the deals which I did for myself and for investors and  see whether you will do it or not do it and what would be the reason.

Location: Missouri city

Year: 2018

Property: 1628 Sqft, 3/2/2

ARV at that time: $135k, now $151k

Purchased: 120k

Rent -$1365, now $1415

Rehab required: $500

Not lot of discount just $15k from the market. We purchased for cashflow and good rental area. It was rented within 30 days and have tenant living in 2 years now and 2 more extended.

Will you consider this deal or not in 2018 if you were me? 

[Rusha Jayasuriya]

I would probably say no but I'd have to see the property to figure out condition, given that you only put $500 in rehab, but I noticed that you didn't set anything aside for capex or long-term maintenance. I suspect the capex/ongoing maintenance costs will hurt long-run and the condition of the property would be the defining factor. The deal hits at my 1% rule (rental income is at least 1% of purchase price and 1365/120k > 1%). The cash flow, however, isn't great once you add the taxes/insurance (estimating at $375), capex ($150), vacancy ($50), and management fees ($100) to loan amount (about $500?), it all adds up and doesn't meet my cash flow desires (minimum $250 and ideal range is $350-400). But it's close! I imagine capex will be high because this is probably an older home in MoCity given the purchase price. Also, you didn't mention whether ins. includes flood insurance, which would be extra as well as HOA fees.