First Investment deal after 3 months on Biggerpockets

[Herlando Y.]

Intention: Buy & hold

House info:
Fannie Mae Homepath Duplex
Built: 1970
Asking: 265,000
ARV: 285,000
Repair: 10,000 (Maybe: House is in great shape)
Down payment: 20%
Closing Cost: 10K

Income: 
  30K - 32.4K
Monthly Expense (+Mortgage&Insurance &Tax&Capex&maintenance&vacancy):
   24.3K

This deal does not look very good at first. If I add property management fee, I will break even and not earn any passive income. However, if I management the property myself and learn the trade by house hacking I can obtain about a 4-5% return eventually. Township tax assessed the property at 400K. Market value is hovering 270-335k. If I can get it reassessed for the current market value then I can potentially save 3k annually (adding value). That will boost my Cash ROI to 10% and will break even after 7-8 yrs.

Property has been vacant for 2 years. It did not sell during a sheriff sale last year November. Been inside the house and everything looks great. I do not see any thing structural and mostly just cosmetic touch up. Only negative about it is the electric heat, but the tenant will pay that. Neighborhood is okay. I say a solid B-. Mostly rentals nearby, but this property is at a dead end.

I will mostly likely be the only one bidding on it. Due to the freakish snow storm the 4 day window has been reduced to 1.5 days? However my agent is pushing me for a higher offer than my 250k. 

What do you guys think?

[Dustin Ruhl]

For your very first deal I would pass. Also, don't let your agent push you into an investment that doesn't make financial sense. They always want us investors to pay more. Always remember it's not their money and they like to spend everyone else's. Be patient, if you have to look outside your market then so be it. Lots of great cash flowing properties elsewhere in the US. Quite a few good and honest turn key companies that can help you invest $250k into 3-4 quality assets. Good luck!