Last minute, first investment property advice

[Jesse Kassel]

Looking for insight as I'm experiencing some apprehension on taking the leap for my first investment property. Here is the scoop:

Under contract for 120k, 40k below list. House appraised for 130k without repairs. needs AT LEAST 25k in repairs for ARV closer to 175k (doing much of the work myself)

Rent around 1500

20% down, 7.990% interest (~9k closing) I'm 1099, make ~100k yr but that fluctuates quite a bit. I have about 100k savings to use.

Cash flow is not great, after PITI looking at about $200/mo self-managing and setting aside 10% for cap ex.

The owner has done some questionable work with the kicker being an un-permitted unfinished addition that would either add 150 sqft or cost to remove/rebuild, still not sure how I want to approach this. After the initial expense I'm still looking at an older roof, windows, and various other needed updates, not to mention what I haven't found yet. My plan is to chip away at these items as needed, keeping about 20k reserves for this in the next 5 years. 

Where I'm worried I might kick myself if I back out is the area is appreciating fairly quickly with a lot of development nearby with many being priced out a neighborhood over and coming this way. I've been dragging my feet for a while on this, watching a lot of deals get picked up fast and flips on homes with better layouts and more sqft going now for 250-300k nearby. I lived in this neighborhood for 7 years, purchased a foreclosure in 2014 for 26k, put about 75k into it and sold for 215k (30k over ask) in 2021, so I feel good about the area. 

Am I banking too much on appreciation? Plan to hold for 5-10 years. 

Is the risk of shoddy work a deal breaker? I've budgeted for what needs immediate correction but worried this could spiral faster than expecting.

Am I actually in a good financial position to do this? Being 1099 and not having guaranteed income is challenging as is, I'm essentially dipping deep into my safety net to fund this project but the last couple of years have been great and I'm eager to get started.