1st deal, need some advice

[Anthony Hill]

Hello and thank you for reading this post.

My wife and I are about to make our first deal. However, I want to run it by a few people of the Real Estate world, to get your opinions.

We have found a 2 bedroom, 2 bath, with a 2 car garage. It is in a nice area, more of a retirement neighborhood.

The list price is $130,000, the taxes are $1311, and we will rent it for $850 or $875 and we already have a renter.

The house has been recently remodeled, with a newer A/C unit, still waiting to hear back about the age of the roof.

The Realtor told my wife that there is an offer on this property, but that she could put it under contract with some earnest money. The houses in this neighborhood do not sit on the market for long. I work out of town, so I am ultimately buying this property sight unseen. However, my wife went and looked at the property and says that it does look nice and that there was not a lot she could find wrong with it, to use for negotiating. We would of course have a contractor and inspector perform the walk through before we closed.

Here are the numbers on the pre-approval loan that I have received from another outstanding BP member/ Loan officer.

Purchase price $130000

Loan amount $104000

Interest rate 5.00%

PI payment - $556

PITI payment - $717

Rent $850 to $875

This deal does not seem to meet the %50 Rule, but I know it is just a good guideline.

The numbers do not look promising, however I am hoping because things are newly renovated and our Tenant is my Mother-in-law. She has a steady job and has taken very good care of her past rental properties. I know renting to family is frowned upon, but I am not looking for advice on that subject. She is my mother-in-law and I want to make sure she is taken care of. We are still running her through the pre screening process and she will still be held accountable for the property and her rent.

I am in Tulsa Oklahoma and a lot of our properties have not met these " Rules of thumb" yet, so I am asking for some advice on this deal.

Thank you guys in advance for any helpful advice you can lend.

[Account Closed]

@Anthony Hill

Like several others in this thread, I would not buy that property.

You would be much better off buying a $130,000 property that rents for $1,250 a month (easily attainable in OKC, if not Tulsa) and giving your mother-in-law $150 a month to subsidize her rent. You end up with $300 more a month in your pocket, and you never have to evict your mother-in-law if she quits paying.