Potential SFH turnkey property. I need help evaluating!

[Courtney Downtain]

Hi BP team I came across a single family in the north houston area and I'm thinking about making it my first purchase as a turnkey rental. I have had analysis paralysis too long and I need to act! I would love some advice on if this is a good deal or not. Here are the details: Asking price: $125,000 Sq ft: 1,197 Bed/bath: 3/1.5 Property tax: $725 Insurance: $800 Down payment: $10,000 Calculated mortgage: $889 Desired rent rate: $1,100 Cash flow: +- $200 If anyone could analyze the numbers and let me know what they think I would be so grateful! Like I said, I am ready to step up from the sidelines and get in the game but I don't want to make a horrible decision. I appreciate any help I can get! Thanks :)

[Trey Watson]

@Courtney Downtain I don't know other markets very well, but in Houston you generally look to satisfy the 1% rule at the very LEAST. This means if the property costs 125,000, you would want to rent to be at LEAST 1250/month.

Generally the older the home is, the higher above the 1% mark you want to be. For example if the property was built in the 70's, you may need to buy it at 100,000 instead of 125. If the property is brand new or built within the last 5 years, then maybe you could pay 125k but it wouldn't be a GREAT deal. Avg to below avg. 

That being said I think in most cases with turnkey purchases, you're going to pay a premium which makes it more acceptable to buy something with less room in the deal. You're trading equity and cashflow for the security of having a paying tenant already in place. 

My opinion- I think you would need to get it around 90-100k for it to make sense for you.