Am I allowing emotions to affect my decision?
Looking at this property at 40 Blessed Way Rock Springs, Ga for my first real estate purchase ever. It used to be some type of boarding school that has closed down and being sold as a quadplex.
23,800sqft
10acres
Bedrooms 11
Bathrooms 4
Built 1972
Price/sqft $20 ( for a house this would be pennies on the dollar but is this the same for apartment complexes, or are they usually cheaper per sqft? Whats a general per sqft price for apartments in rural areas?)
Tax assessed value: $256,150
The list price is currently $475,000 and according to the listing, potential rents are at $5,300 (potential because I think they just closed the school down and don't actually have tenants yet) which puts it roughly at 1.1% rule so seems like it just barely makes it, would be nice at 2% but we can't always windfall I guess lol. I am going to have a minimal amount for down payment and closing costs and will try to wrap as much as I can into the loan so when I ran the numbers, my cashflow, based on the estimated $5,300, was slightly more than $500 after expenses (if I ran the numbers correctly), which to me seems very tight for having such an expensive property. I might be breaking even some months but I work full time so can supplement if its ever needed.
Some of my concerns;
The property is in a small rural area, population less that 10,000 and its 30 minutes, 20 miles, from a medium sized city, Chattanooga, TN which is across state lines. Overall I see some general difficulty with vacancies. On top of that, because the property was previously some type of school that students lived in, there seems to be some units that share communal bathrooms and it has this whole communal vibe, which I personally don't mind but again, might hurt my ability to keep vacancies low.
One of the perks, the property sits on 10 acres of land. But.. for almost half a million dollars, a structure this size on 10 acres of land would be a steal closer to a city but in such an isolated rural area (many farms in the general area), does the value of the land and structure justify that high of a price?
Overall I personally like the property and the land but am I allowing that to cloud my judgement on the numbers? The $5,300 that makes the deal just barely fit the 1% rule is based on full tenancy but I am concerned on the ability of the property to appeal to broad enough group of people to ensure that. What price would allow sufficient wiggle room in the numbers that I wouldn't be so concerned with the risk of vacanies?
Or am I overthinking it and the size of the land and property is a good deal at this price regardless of the remoteness of the area and odd communal configuration?