First Timer Overload

[Travis Bagley]

Hello BiggerPockets!

First time investor and homebuyer here and I wanted to run a scenario by you all to see if I am making a smart move or getting in over my head. 

I have a house in Fairfield, OH that I am looking to buy. It caught my eye because it is in a neighborhood that is very rentable where houses normally go for around 110-120K. This house is listed at 65 and is bank owned. I am not currently nearby so I would have to purchase the house sight unseen, but I have family members that are experienced investors who have gone over to take a look at the house. They live 3 streets away so relying on them for some help would be possible.

Below are the details:

• LP -$65000
• 1025 SQRFT
• 3 Bed
• 1 Bath
• Attached garage
• No basement
• Should rent for 900 min

Rehab estimate:

• New kitchen - $7000
• HVAC - $5000
• Bathroom - $1500
• Flooring - $2000
• Doors - $1000
• Hot water heater - $500
• Contingency - $3000 

Total rehab $20,000

Now all of the repairs don't need to be done at once. I plan to live in flip this place and turn it into a rental eventually. My only fear is the water and gas are turned off and can't be turned on for inspection. There is a known gas leak, but I do not know how estimate that. I have been told it could be a few hundred dollars or up to possibly 5 thousand if the entire yard needs to be ripped up.

I ran the rental numbers on this and being really conservative it looks like I could offer 55K and still have some extra wiggle room for this gas line issue. 

Rental key indicators:

• CAP 4.85%
• COC 11.55%
• Cash flow 303.06
• Assume 10% vacancy
• Assume 10% management
• Assume 100/month repairs

What do you think? Am I nuts? Is this an ok deal for a first time buyer? I just really want to get started!