New Here, 1st time investor

[Preston C.]

Hi, just joined the site. Been reading through some of the forums here and looks like there is a lot to learn. A post about ROI earned on rental properties recently caught my eye, so I spent some time reading through it and decided to join. This one >>>https://www.biggerpockets.com/forums/52/topics/143...

After reading it, it made me feel pretty good about a deal I recently came across.

So a little introduction, I'm from a small town in Kansas and also a full time MBA student. I just recently finished up my first rental property and found my first tenants that are set to move in next week. I've had a lot of questions through the process, so it would have been nice to find this site sooner. 

My family has investments in rental property, so I've always figured I would get into it too at some point. So, I found a property that had been foreclosed on last September that needed some work. Pretty solid house overall, about 1050 sq. ft., just needed a new furnace and AC, water heater, new floors, a lot of painting and touch up work, and several other minor things. It may not sound like much work, but as a full time student, it was a lot to handle on weekends off and on.

So I purchased the property with cash at $23,000. It had sold previously for $85,500 and before that $63,000. My dad actually had a house in the same town that was very similar in size that he rented for $650/mo, so I figured I could rent this for about the same. I just recently showed the house to some people and found a good applicant that is set to sign a contract soon and move in for $650/mo. Renovations on the property totaled my investment to roughly $28,000, so after deducting taxes, I'm looking at about a 24% return on an all equity purchase (I haven't yet gotten insurance on the property, so that isn't figured in). I actually bounced back and forth on just flipping the property before I rented it.

I never really looked into doing a leveraged deal, mostly because I didn't want to deal with a bank for a mortgage since I was able to pay cash. I figured I'd gotten a good deal, but didn't realize til reading through this forum how good it was, as a lot of posters aren't even getting that return with a leveraged investment.

I was just curious what you guys thought about it. And I know every market is different, but what kind of ROIs are you all looking at with all equity purchases? Or is it even worth doing all equity purchases, if you could receive a higher ROI with a mortgage? Also, what kinds of things do you guys look at when deciding whether to flip or rent (ROI, long-term vs short-term profit)?