San Antonio Property with foundation issues
Good Evening everyone,
We're looking at a property in central San Antonio, TX and we are on contract now in the option period.
The property has a CAP rate of 9%.
Cash flow / initial investment of : 13.86%
I'm including in the calculation 10% repairs and maintenance and 5% capital expense. Calculation also accounts for insurance and property taxes. I'm going to manage the property and there are currently renters whose lease just renewed. My realtor and I walked through the property today. It is not a high end rental.
My issue is there are foundation issues which is not uncommon in SA from what I understand. It is pier and beam foundation and part of the house is leaning some warping of windows. However, it is rented and those types of things don't matter to renters of this class of property. They've provided an estimate of 10k to fix the foundation and 5k to fix the roof. There currently no leaks on the roof.
Thoughts? To me this is a cash flow property. I just want to make sure I'm not missing something or if someone has an opinion on the foundation.
Thank you!