All Forum Posts by: David Light

I have a 3 bed 2 bath under contract in Abilene and the current debate is buy and hold or flip.Here are the deal details:

Purchase: 64,900

Repairs: 16,811

Holding Costs during Repair: 2,500

ARV: 110,000 - conservative numbers as comps from realtor showed support for 120,000

Property Taxes - 2,090 a year and home insurance is roughly 750 a year

Estimated Rent: 1,050 per month

Financing: 80% of purchase price at 5%, 20% down, repairs come out of my pocket and HELOC at 6% if needed

So what do you think? Would I get the best return on my money renting or flipping? I don't have plans to purchase another property soon so would be fine with leaving the equity in the house if that was the better route.

Any feedback is appreciated!

thanks for the quick response @Joel Owens

I have money that could be used as a down payment but it would leave me with little cash reserves so yes, trying to preserve that. If I had to pay the note without rent it would be tight but I could.

I'll have to research the appreciation and rent rates. I've been told appreciation is 4% but need to vet that.

I'm working on purchasing my second property and currently have two private lenders that I'm working with to fund the deal. At this point it seems I may be able to have one loan for 80% of the house value at 5% and a second loan for 20% at 6%. We haven't picked a specific property yet but I've run numbers with some in the area and this is what it could potentially look like.

With rents very close to 1% of the purchase price in the market (college station) the cash flow would be slightly negative or break even but I'd have someone paying my mortgage with limited money from me for closing. Most houses in the area need no repairs.

With no money down deals is breaking even good? Should I bring cash to the table to have lower mortgage payments and better cash flow? Is this market just no good and I should look for a market with better rent percentages?

Thanks for any tips and thanks to bigger pockets for the template I used to put the analysis together above.

@Andrew Robison

We have family in Abilene that's keeping an eye on the house for us. We're managing things for now and as we need people to go to the house or be there for a repair man we're hoping family will help out. We'll see how it goes.

We looked into management companies but they were pretty pricey.

Thanks @Brandon Turner - I setup some alerts. Didn't know that was a feature before.

My wife has some family in Abilene and we just found a good deal there. We looked in the Richmond area for awhile but never found anything worth jumping on. How are you searching?

I convinced a family friend to loan me the money instead of have it sit in their checking account making .09 percent interest. Was a huge money saver.

Hello Bigger Pockets!

I'm a new member from Richmond, TX. I've been lurking around the forums for awhile just soaking up the content. Thanks for all the helpful information.

I've purchased my first single family rental in Abilene, TX. Below are some of the deal details and a before/after pic of the kitchen. It's rented now and we just collected our first rent check. I couldn't be more excited to start our real estate future.

Purchase Price: 115K (estimated value of 135K after repairs - short sale)

Down Payment: 25%

Loan: 86,250 (private money) 20yr note 500 payment

Closing Costs: roughly 800

Repair Expenses: 5,100

Monthly Rent: 1,300

Property Taxes: 2,800

Insurance: 900

With all of that I project we'll have some positive cash flow and pretty good initial equity due to the purchase price. Thanks for all the helpful info and let me know what you think.