First deal, minimal rehab, rents close to 1% - worth it?
After months of learning from BP (thank you all by the way, this place is amazing), am working on my first deal and would appreciate any advice:
2/1 in rural Colorado, on the MLS. Pretty much fully rehabbed and rent ready. Older furnace will need to be replaced at some point, so setting aside cash for that as a rehab budget, just in case.
79K Purchase (final offer from the seller, listed for 84K, I tried for 70K and went back and forth)
7K Rehab
3K Closing Costs
All cash purchase at 89K total. Planning to immediately refi with a portfolio lender at 75% of the purchase price, which would leave me with 30K in the deal.
ARV 90-95K (depending on the furnace replacement).
Monthly rent: $900, $950 if I'm lucky.
Monthly expenses (10% vacancy, 10% PM, 10% repairs, maintenance, capex, taxes, insurance) are right around $350/m. Utilities are all paid by the tenant.
After financing, mortgage payment is around $350/m
Monthly cash flow: $200-250/m. COC Return 8.5-10%. PM says maybe 50-50 odds for that extra $50/m in rent.
Pros: Pretty close to the 1% rule, don't have to worry about rehab, even 8.5% COC sounds better than an index fund
Cons: Not much room for value add, won't be able to BRRR and get my 30K back out since the ARV isn't high enough, local market isn't appreciating much
Would love some bottom line advice - I'm right on the fence between thinking anything in the vicinity of 1% is better than most of what I've seen locally and pretty good for my first deal, and thinking I should hold out for a deal with more value add so I can end up with less cash in the deal.