Possible First Deal
Pro - great area with big upside - great schools
Con - price? Not sure if the deal makes sense.
1950 2 bedroom 1 bath - 1000sf in an older neighborhood, surrounded by like homes, but all well maintained.
Asking 80k
Currently has a long term renter in there at $650/month - but it should be rented for $800-$900 based on comps - long waiting list for rentals in the area because of schools.
Not a lot of investors in the area because it's SC and they're rough on investment property taxes - 3x primary residence. In this case - $1100/year. Only 5 miles from NC where the property taxes would be 1/2 that.
Home needs paint, carpets, kitchen appliances. Will need HVAC within the next couple of years.
It's being sold by a real estate investor who is now in his 70's and just looking to get out. Will likely purchase with favorable terms, he'll be holding the note, 15k down.
So - I've got potential rental income at $9600/year - with taxes, insurance, vacancy - that should put me at about $7000/year. less debt service of $2400/year.
= $4600/year
Less Maintenance at 35% of rent - $3360/year
Bottom line - cash flowing $1240/year?
So - with a $15,000 initial outlay - I'm at an 8% ROI?
What am I missing - does this make sense? If not, how would I have to structure it to make sense? Thanks for your help!