Your thoughts?

5 Replies

wanted to get everybodys thoughts on a deal that I just completed. I bought 2 sfh right across from each other in a b neighborhood. Both appraised for around 95,000, I got both for 60,000 each. The loan is together on them which comes out to 815 a month for both. They both have been rented to the same tenants for 5 years, both are good tenants and are staying. Each house rents for 950 a month so I receive 1900 total a month. Please let me know your thoughts. Thanks for the help.

Good job.

Any deferred maintenance? Make sure you put some money aside each month so you can start catching up. Unless they're newly renovated and pretty, which I doubt if the tenants have been there 5 years plus, you should keep in mind that you will probably have to do some work if you have any turnover.

My calculation is that I would pay about $65,000 for a house that could be sold for $95,000 without any repairs.

Also at a 50% expense ratio, you have about a 9.5% cap at the current rent rate.  As long as your cost of money is less than 6.5% I think you have a winner as a buy an hold.

It looks to me that this works as a flip or buy and hold.

Congrats.

Bill

thanks everybody for the input. Yes it does have some minor maintenance issues.  Limbs on the house, gutters cleaned, just normal small things. I'm using these as buy and holds for awhile. I'm not really using them to have any extra cash flow right now, just want to have them for investments for my future. 

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