First time investor -- is this a good deal??
New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes
First time investor -- is this a good deal??
Most Popular Reply
Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votesQuote from @Justin Miles:
Hello BP community! I'm new to RE investing and excited to be here! My wife and I are currently under contract on our first rental investment! Also, we are new parents to a 7 month old, so crazy year!
The deal:
Turnkey Duplex in Fairborn, OH that is currently vacant. Each unit is ~780 sq ft, 2 bed/1 bath. House built in 1944. Both units recently renovated (cosmetically): new floors, paint, trim, etc. New windows in each unit, new furnace in one unit (other unit has old furnace), roof is in good shape (5+ years left), and newer appliances. Nothing known wrong/needs fixed.
Purchase price: $176k (also, the appraised value). Putting 25% cash down
Rent: Similar rents in the area are $750-1050. I am anticipating $900 per unit in area ($1800). Both units are currently vacant.
Rental analysis assuming 10% vacancy, 5% maintenance, and 10% cap-ex (anticipating needing 1 new furnace in 1-2 years). Input assumptions show $300 monthly cash flow / 6.7% CoC ROI, $14K NOI, and a 8.6% 5 year annualized return if sold.
We are under contract, so it is likely too late (first mistake).
To clear my conscious or learn from my mistake, is this a good deal??
Thank you!
For those that believe the numbers are conservative I question how they have derived maintenance/cap ex. Your numbers are way too low even if everything was new today.
conservative underwriting should use the conservativ3 number on all ranges. This implies $1500 total rent.
That rent range will be cash flow negative at 1% monthly rent ratio.
That purchase price reflects that this property has historical appreciation below the inflation rate. It likely will decline in value in inflation adjusted dollars.
Hopefully you did not waive your inspection contingency. Seeing you are paying fill retail (ie appraised price), you should not have waived an6 of the standard contingencies. Get a good inspector.
Note S&P has lifetime return near 10%/year. To invest in a non passive investment that has the risk of RE, it should return a much higher return. Anything less than 20%/year projected return and I question why.
Good luck
21 Replies
- Real Estate Agent · Central New York · Member since 2023 · 207 posts · 96 votes7mo
Welcome to the community! Without physically seeing the property or the inspection report, its a little hard to get a full idea of the property and any work it may need. Going off what you said, is it $300/mo total or per unit? If per unit, great. If total, it's a bit tight. One broken window or a new sink kills your cash flow for the entire month. It would take over a year of cash flow to account for a new furnace. If the property is TRULY turnkey and has no immediate capex or maintenance, it's OK considering the tradeoff. But I would absolutely have reserves on hand as you suggested for when things do go wrong, or if you hire a PM to rent the property out. At that price, 500+/mo would be ideal just for a bit more cushion. If it's a safe deal, and you can minimize vacancy, it seems like an OK first deal. I always advocate for the first investment property to be boring and predictable while still cash flowing. Any properties after you will have worked out kinks, have a better idea what to look for, and can be more lenient with risk/cash flow.
- New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes7mo
Quote from @Kiernan LaFaver:
Welcome to the community! Without physically seeing the property or the inspection report, its a little hard to get a full idea of the property and any work it may need. Going off what you said, is it $300/mo total or per unit? If per unit, great. If total, it's a bit tight. One broken window or a new sink kills your cash flow for the entire month. It would take over a year of cash flow to account for a new furnace. If the property is TRULY turnkey and has no immediate capex or maintenance, it's OK considering the tradeoff. But I would absolutely have reserves on hand as you suggested for when things do go wrong, or if you hire a PM to rent the property out. At that price, 500+/mo would be ideal just for a bit more cushion. If it's a safe deal, and you can minimize vacancy, it seems like an OK first deal. I always advocate for the first investment property to be boring and predictable while still cash flowing. Any properties after you will have worked out kinks, have a better idea what to look for, and can be more lenient with risk/cash flow.
Hello Kiernan! Thank you for the prompt reply! this is very helpful.
Unfortunately, I did not get an inspection done. (another mistake). The projected cash flow is total for the property ($300) which I evaluate as conservative. also, might be able to get higher rent ($950), which would help my cash flow. I am concerned of the very tight budget. Like you said, one major thing goes wrong kills my cash flow for months, potentially the year. Also, the investment would take 5+ years to really pay off.
My thought was if there was something better out there I could hold off for that has more margin & higher returns from my cash investment.
- 7moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 904 votes
Congrats on the first deal and becoming a new parent, that’s a big year already. From a high-level view, this looks like a very reasonable first investment for the Dayton area, especially if it’s truly turnkey. Your rent assumptions are conservative, your expense reserves are realistic for an older duplex, and positive cash flow on a 25 percent down duplex is a solid starting point. The biggest things I’d double-check are furnace age on the older unit, sewer line condition given the build year, and whether $900 is easily achievable quickly since vacancy risk is your main short-term variable. Even if it’s not a home run, this looks more like a “base hit” than a mistake, which is exactly what you want on deal one.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes7moI don't know what is in your contract, but usually there is an inspection clause. Take a look and read the contract. Have someone experienced with contracts read it or have an attorney read it. Make a list of all of your concerns and discuss them with someone before closing.
Quote from @Justin Miles:
Hello BP community! I'm new to RE investing and excited to be here! My wife and I are currently under contract on our first rental investment! Also, we are new parents to a 7 month old, so crazy year!
The deal:
Turnkey Duplex in Fairborn, OH that is currently vacant. Each unit is ~780 sq ft, 2 bed/1 bath. House built in 1944. Both units recently renovated (cosmetically): new floors, paint, trim, etc. New windows in each unit, new furnace in one unit (other unit has old furnace), roof is in good shape (5+ years left), and newer appliances. Nothing known wrong/needs fixed.
Purchase price: $176k (also, the appraised value). Putting 25% cash down
Rent: Similar rents in the area are $750-1050. I am anticipating $900 per unit in area ($1800). Both units are currently vacant.
Rental analysis assuming 10% vacancy, 5% maintenance, and 10% cap-ex (anticipating needing 1 new furnace in 1-2 years). Input assumptions show $300 monthly cash flow / 6.7% CoC ROI, $14K NOI, and a 8.6% 5 year annualized return if sold.
We are under contract, so it is likely too late (first mistake).
To clear my conscious or learn from my mistake, is this a good deal??
Thank you!
- 7moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Justin Miles:
Hello BP community! I'm new to RE investing and excited to be here! My wife and I are currently under contract on our first rental investment! Also, we are new parents to a 7 month old, so crazy year!
The deal:
Turnkey Duplex in Fairborn, OH that is currently vacant. Each unit is ~780 sq ft, 2 bed/1 bath. House built in 1944. Both units recently renovated (cosmetically): new floors, paint, trim, etc. New windows in each unit, new furnace in one unit (other unit has old furnace), roof is in good shape (5+ years left), and newer appliances. Nothing known wrong/needs fixed.
Purchase price: $176k (also, the appraised value). Putting 25% cash down
Rent: Similar rents in the area are $750-1050. I am anticipating $900 per unit in area ($1800). Both units are currently vacant.
Rental analysis assuming 10% vacancy, 5% maintenance, and 10% cap-ex (anticipating needing 1 new furnace in 1-2 years). Input assumptions show $300 monthly cash flow / 6.7% CoC ROI, $14K NOI, and a 8.6% 5 year annualized return if sold.
We are under contract, so it is likely too late (first mistake).
To clear my conscious or learn from my mistake, is this a good deal??
Thank you!
Happy to analyze the deal for you. Send it to me and ill send you rent and sales comps. if you have an agent, have the confirm age of roof as well.
You have inspection as well so make sure to check out the report well.
ReafCo | Ahmed Group 55 Reviews - 7moSamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey, if you PM me the address/Info I can take a look.
Reafco - Samuel Diouf528 Reviews- New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes7mo
Quote from @Samuel Diouf:
Hey, if you PM me the address/Info I can take a look.
Thanks Samuel, sent you an email.
- 7moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Justin Miles:
Hello BP community! I'm new to RE investing and excited to be here! My wife and I are currently under contract on our first rental investment! Also, we are new parents to a 7 month old, so crazy year!
The deal:
Turnkey Duplex in Fairborn, OH that is currently vacant. Each unit is ~780 sq ft, 2 bed/1 bath. House built in 1944. Both units recently renovated (cosmetically): new floors, paint, trim, etc. New windows in each unit, new furnace in one unit (other unit has old furnace), roof is in good shape (5+ years left), and newer appliances. Nothing known wrong/needs fixed.
Purchase price: $176k (also, the appraised value). Putting 25% cash down
Rent: Similar rents in the area are $750-1050. I am anticipating $900 per unit in area ($1800). Both units are currently vacant.
Rental analysis assuming 10% vacancy, 5% maintenance, and 10% cap-ex (anticipating needing 1 new furnace in 1-2 years). Input assumptions show $300 monthly cash flow / 6.7% CoC ROI, $14K NOI, and a 8.6% 5 year annualized return if sold.
We are under contract, so it is likely too late (first mistake).
To clear my conscious or learn from my mistake, is this a good deal??
Thank you!
For those that believe the numbers are conservative I question how they have derived maintenance/cap ex. Your numbers are way too low even if everything was new today.
conservative underwriting should use the conservativ3 number on all ranges. This implies $1500 total rent.That rent range will be cash flow negative at 1% monthly rent ratio.
That purchase price reflects that this property has historical appreciation below the inflation rate. It likely will decline in value in inflation adjusted dollars.
Hopefully you did not waive your inspection contingency. Seeing you are paying fill retail (ie appraised price), you should not have waived an6 of the standard contingencies. Get a good inspector.
Note S&P has lifetime return near 10%/year. To invest in a non passive investment that has the risk of RE, it should return a much higher return. Anything less than 20%/year projected return and I question why.
Good luck
- Member since 2025 · 104 posts · 37 votes7mo
Congrats on buying an Investment Property! Remember, you control your Cash Flow...Is it a good area? Can't change Location...
- Member since 2025 · 240 posts · 97 votes7mo
@Justin Miles Congrats on the new baby and your first deal! The numbers look solid for a turnkey duplex. Focus on tenant screening next to protect that cash flow. Great start and good luck!
- 7moBen FernandezBusiness MemberRealtor · Lancaster, PA · Member since 2025 · 169 posts · 97 votes
Congratulations on your deal!
What are your taxes, insurance, property management, water, sewer, trash, common electric, snow removal/lawncare, turnover, and set aside funds for CapEx?
Point is, your operating expenses of $81 per month (or 5% total) appear unrealistically low.
If I use an operating expense ratio of approximately 35%, which I think you could potentially do (if you self manage), your cash flow becomes about $150 per door or $300 total each month.COC - 7.30%
GRM - 8.15
Price-to-rent ratio 1.02%
DSCR 1.36
Break even point occupancy- 82.47%Short answer - YES - You did well. Just watch your bottom line and plan accordingly. Good job!
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes7mo
Just because you are under contract doesn't usually mean it is too late to back out. Considering you put 25% down, that means you're using financing and will have at least some contingencies. You should still have an out. Who is advising you? Why didn't you get an inspection?
It's impossible to budget capex accurately without an inspection unless you are experienced enough to walk through and basically do your own inspection and know what everything costs. What if the sewer line is shot and will cost $20k to replace next week? Who said the roof has 5+ years left? How is the plumbing, electrical, foundation, driveway, etc.? Why are both units vacant? Too many unknowns here for anyone on the internet to advise you properly. You should have an experienced local agent who also invests in the area themselves and knows this exact location very well helping you. Get an inspection! Look at real numbers (total up all of the expected capex at a minimum so you have an idea what your expenses will be over the next few years). Using percentages without considering what the actual costs will be can get you into big trouble. I guarantee after an inspection there will be more than just the one furnace on the capex to-do list. Be realistic, run the numbers for real not just random percentages, and make an informed decision from there.
All that said, based on the limited info that we have, personally I would likely bail on this deal even if I had to lose the earnest money. Here's why: the rent simply isn't sufficient to cover opex and capex over time even in a best-case scenario. 5% maintenance is only $90/month. 10% cap-ex is only $180/month or $2,160/yr. That is simply not enough to run a rental, based on my personal experience operating rentals for many years now (often self-managing and doing most repair work myself). This will likely be a death by one thousand cuts scenario, even without any tenant issues. So it would be a pass for me unless you're gaining instant equity or the surrounding properties are worth a lot more and you can force a lot of appreciation through value-add (doesn't sound likely considering what you wrote about it being recently renovated). Even in your best case scenario you'll only be making a little bit of money. I like to make good money in order to deal with all of the challenges and risks of running a rental. I have yet to have a property where everything goes smoothly all of the time, and you'll be amazed at how many unexpected expenses a property can require. You can do better with more passive, lower risk investment options IMO.
- New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes7moThank you very much, Tom. I greatly appreciate you helping a newbie out here. Your candid, thorough, and honest advice has been an extremely helpful for me in this deal.
Quote from @Steve K.:
Just because you are under contract doesn't usually mean it is too late to back out. Considering you put 25% down, that means you're using financing and will have at least some contingencies. You should still have an out. Who is advising you? Why didn't you get an inspection?
It's impossible to budget capex accurately without an inspection unless you are experienced enough to walk through and basically do your own inspection and know what everything costs. What if the sewer line is shot and will cost $20k to replace next week? Who said the roof has 5+ years left? How is the plumbing, electrical, foundation, driveway, etc.? Why are both units vacant? Too many unknowns here for anyone on the internet to advise you properly. You should have an experienced local agent who also invests in the area themselves and knows this exact location very well helping you. Get an inspection! Look at real numbers (total up all of the expected capex at a minimum so you have an idea what your expenses will be over the next few years). Using percentages without considering what the actual costs will be can get you into big trouble. I guarantee after an inspection there will be more than just the one furnace on the capex to-do list. Be realistic, run the numbers for real not just random percentages, and make an informed decision from there.
All that said, based on the limited info that we have, personally I would likely bail on this deal even if I had to lose the earnest money. Here's why: the rent simply isn't sufficient to cover opex and capex over time even in a best-case scenario. 5% maintenance is only $90/month. 10% cap-ex is only $180/month or $2,160/yr. That is simply not enough to run a rental, based on my personal experience operating rentals for many years now (often self-managing and doing most repair work myself). This will likely be a death by one thousand cuts scenario, even without any tenant issues. So it would be a pass for me unless you're gaining instant equity or the surrounding properties are worth a lot more and you can force a lot of appreciation through value-add (doesn't sound likely considering what you wrote about it being recently renovated). Even in your best case scenario you'll only be making a little bit of money. I like to make good money in order to deal with all of the challenges and risks of running a rental. I have yet to have a property where everything goes smoothly all of the time, and you'll be amazed at how many unexpected expenses a property can require. You can do better with more passive, lower risk investment options IMO.
- Investor · Cumming, GA · Member since 2015 · 79 posts · 72 votes7mo
@Justin Miles
I'd say, not horrible. It's not a home run either. Not much wiggle room initially. Hopefully you can bump up the rents in the next few years and the property appreciates in value. I would have at least 2000 in my account for any problems. Yes, a problem can and will likely cause a negative cash flow. Hopefully you still have day job. If so, you will have a nice tax deduction. I've had to replace a septic field on a house, that blew most of the years income quickly. Think about in expensive upgrades that allow you to raise rents and value. Lots of learning by doing. Have a solid lease and always stick to it.
Good luck!
- New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes7mo
Quote from @Tom T.:
@Justin Miles
I'd say, not horrible. It's not a home run either. Not much wiggle room initially. Hopefully you can bump up the rents in the next few years and the property appreciates in value. I would have at least 2000 in my account for any problems. Yes, a problem can and will likely cause a negative cash flow. Hopefully you still have day job. If so, you will have a nice tax deduction. I've had to replace a septic field on a house, that blew most of the years income quickly. Think about in expensive upgrades that allow you to raise rents and value. Lots of learning by doing. Have a solid lease and always stick to it.
Good luck!
Thank you, Tom! This is a great post, very helpful.
- Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes7mo
you are local-- some investments might make sense for you that wouldn't work for someone buying from out of state and relying on a property management company. I would not buy now the first properties that I bought -- but I made money in cash flow and also profited when we sold. I also donated labor (a lot), made a lot of mistakes, and learned A LOT. I lived in the Dayton area many (almost 20) years ago and at least then, Fairborn would have been a decent place for a rental. Post a link to the property on zillow and you'll probably get more area specific replies. I'm pretty sure at 88k per door for 2/1 800sq ft property, I could make money in a decent rental area in the greater akron area. Here, if the layout and finishes are nice, and if there are some ammenities like a garage, central air, or fenced yard you could push the rent up higher than 900. From what I've seen, most of the time on a purchase, appraisers just use the contract price unless they really think its too high so I wouldn't put too much stock in that.
- New to Real Estate · Dayton, OH · Member since 2026 · 6 posts · 10 votes7moVery good points, thanks for the thought & comments, Jill!
Quote from @Jill F.:
you are local-- some investments might make sense for you that wouldn't work for someone buying from out of state and relying on a property management company. I would not buy now the first properties that I bought -- but I made money in cash flow and also profited when we sold. I also donated labor (a lot), made a lot of mistakes, and learned A LOT. I lived in the Dayton area many (almost 20) years ago and at least then, Fairborn would have been a decent place for a rental. Post a link to the property on zillow and you'll probably get more area specific replies. I'm pretty sure at 88k per door for 2/1 800sq ft property, I could make money in a decent rental area in the greater akron area. Here, if the layout and finishes are nice, and if there are some ammenities like a garage, central air, or fenced yard you could push the rent up higher than 900. From what I've seen, most of the time on a purchase, appraisers just use the contract price unless they really think its too high so I wouldn't put too much stock in that.
- 7moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Justin Miles you've got to start somewhere and make mistakes to learn from, to do better deals!
So, don't let what we're all writing get you down 😁
Some considerations:
1) INSPECTONS: Never waive inspection clause, unless you personally walk the proerpty and know as much as an inspector!
- Sewerscopes are extremelly important on any building over 30 years old, unless you can find a permit & passed inspection at the city proving it was replaced.2) PURCHASE PRICE: paying asking price is rarely a good investment.
"You make your money when you buy" implies this.
- Work the numbers backwards from anticipated rents, to determine what to offer.3) MAINTENANCE: you used 5% for this deal.
- What do you consider "maintenance"?
- What prices did you research for each maintenance issue?
- What exactly will your 5% estimate cover?
Logical Property Management4.9450 Reviews - Member since 2026 · 97 posts · 57 votes7mo
Congrats on going under contract on your first deal - that's a huge step!
Your numbers look reasonable for a first investment. A few things to consider:
1. The 1% rule ($1800/$176k = 1.02%) is right on target, which is solid for today's market
2. Your 10% vacancy is conservative for a duplex - duplexes tend to have lower vacancy since you're not 100% vacant if one tenant leaves
3. That old furnace in the second unit is a known expense - budget $3-5k for replacement and factor that into your first year reserves
The real question isn't whether this is a "perfect" deal - it's whether you'll learn from it and keep building. Many successful investors look back at their first deal and see all the mistakes, but they also see how it gave them the confidence and experience to do the next 5, 10, or 20 deals.
Good luck with closing!
- 7moBo SmithPro MemberHinton, WV · Member since 2026 · 1k+ posts · 373 votes
Congrats on the first deal and the baby! That's a lot happening at once. Your numbers look solid, but since both units are vacant you're looking at immediate carrying costs. At $1400/month PITI plus utilities, you could be $3000-4000 in the hole if it takes 60-90 days to get both rented. In slower markets like Fairborn, winter months can stretch that timeline. Have you stress-tested how many months of double vacancy you can handle before it eats into your down payment?
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