First Home buyer needs advice (rental investment after 2 yrs) SC

[John Pae]

Hello BP investors!

I need some of you guy's advice/inputs/critics/encouragement on my first investment.

I live in Columbia, South Carolina. I am looking for my first home in downtown area.

This house will turn into a rental after few years, so I need good advice from you guys!

So here's my target/plan and please feel free to crush it, rip it since I am open to any comments.

I found a city loan called Purchase Rehab, which is equivalent to FHA 203k rehab loan.

My plan is to get a pretty good deal on house around 90-100k or below, then use 20k to renovate it, so that it will match somewhere around neighborhood house value. This will make total loan up to 130,000. This potential area can grow because city of Columbia is planning to build baseball stadium and other projects around this neighborhood.

After two years if I do rent this place for 1% value, $1300/month, and use 50% rule with subtracting debt service, profit comes out $66... (this is with 3.5 down pay for FHA loan). I mean if I can get a good deal with less renovation money, profit will be higher.

My strategy will be just buy and hold. I know there are much more than 50% rental property rule, but I am trying to see where I should start.

So, am I in right track? or totally off? 

Any comments are welcome!