Possible First Investment. Would you do this?

5 Replies

I am looking at this deal and wanted to get feedback from the BP community as to their thoughts on this deal.  

This would be my first deal.

I like to have a cap rate that is 3 percentage points above my cost of money.  If you feel good about the expenses then you make it.  Since this is a buy and hold I am not concerned that there is no immediate equity.

Good Luck.

Bill

What is the area like? Are you going to have a lot of repair and vacancy costs due to your clientele? Any large repairs for the house coming up? 

The numbers are exactly what I look for but the properties tend to be in Class A neighborhoods. Many of the people on here that buy those types of houses like much higher cap rates and cash on cash return. Just a thought.

The first one is always the hardest getting your feet wet.

Cool graphics.

Purchase price + rehab equaling ARV is not the most favorable but I would still proceed if you are confident about the area, the ability to get good tenants, see a good chance for appreciation, and if you are in for the long haul. Buying at ARV means you have to hold it for a year or two depending on the market to just to get your money back after selling costs.

@Terry Hershberger   sorry I need to repost.  I am only going to put down 20% and the asking price is around $65,000 but I am in the process of negotiating.

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