DEAL ANALYSIS: First investment property
I am under contract for an 8 bed/8 private bath SFH located in Kansas City, Kansas
Purchase price: $375,000
Appraisal from 2020: $512,000
Downsides: waived inspection on a 100 year old previously renovated property and per zoning, cannot do STR (30+ days only)
My brother will live in it free to help manage and plan will be to rent out to travel healthcare workers with two nearby level 1 trauma hospitals within a mile distance.
I feel like I hit jackpot with this first investment property with $137k potential equity from the 2020 appraisal. COC return between 30-45% depending on avg market rent 700-850/mo for the area, 2-3k cashflow per month. Absolute worst case scenario 600/mo still yields 20% COC return.
With the super hot housing market, did I get lucky finding this deal? What am I missing?
Assuming everything goes as planned, will do a cash out refi in six months to keep scaling with the potential equity.