Good investment or not?

Question

There’s a property for 100k fully remodeled 2 doors and combined rents for 1450 per month. The property more than likely would lose value and not sell at 100k down the road. With the cash flow considered, would you buy the property for 100k knowing that it will rent for atleast 1450 per month and owner would carry note for 5 with 10% down and monthly payments of 700?

Brian Formulak · Answer

I base my investments on cash flow, and that is a nice cap rate there. However, knowing that it wouldn't be valued at $100k down the road, why not try and get the price a bit lower?

Deone Doctors · Answer

@Tracy Streich

My thoughts too.  What's the major intersection? 21st and Sheridan?

Tracy Streich · Answer

I would be interested in the particular neighborhood.    There are not many areas in Tulsa that are not growing right now.

Matt Casey · Answer

@Daniel Schiller

Tulsa Oklahoma and taxes are $793/year

Matt Casey · Answer

@Derek Harris definitely not a growing area but it’s right in the middle of Tulsa. The only main worry would be the actual property value declining because of the area

Daniel Schiller · Answer

@Matt Casey where is it located and what are the property taxes?

Derek Harris · Answer

It depends. Always underwrite the market first. Look at the current population, population growth, jobs, etc. If it's a declining market or there is only a singular employer, then I would not buy it. Worst case scenario is that it cash flows now and then a few years down the road, you are left with no renters and no one willing to purchase your property.