An extra set of eyes! (Help me with this deal)
Hello friends,
I am looking to purchase my first investment property. Currently, I am living in Las Vegas and looking to purchase out of state. The deciding factor for investing out of state has been reading David Greene's Long-Distance Real Estate Investing. I have boots on the ground in Memphis and know that the market tends to cashflow well.
The property is in Memphis TN located within a C class neighbourhood where the number's work for me and I feel comfortable investing. The property will need about $5000 in repairs. There is a current tenant month to month and paying below market rents which could be $675-$700. Comps in the area run about $55,000-$60,000.
As a new investor, I would love to share for some feed back on what you think about the deal.
Thank you in advance!!
*This link comes directly from our calculators, based on information input by the member who posted.
Most Popular Reply
With a property at that price I would do a Hard money lend and pay cash for the property, get enough from the lender to also do the rehab. Once you have done the rehab hopefully less than 30 days, go to a bank and get it refinanced and pull all the money back out.
Example
Hard money Lend: 52k (Give the lender a great deal flat 2% ($1400) for 45 days) Close with the cash, rehab fast. So total in is 52k + $1400 = $53,400
After rehab appraisal: 65k (estimate)
20% equity kept for the bank: 13k
Cash out 52k, so your out of pocket 1400 bucks.
This is what I do and it works great. If it appraises for 67k, your now in the property with no money down. This method will decrease your cash flow but also decreased out of pocket expense to buy these houses.