What do you think

[David Wolf]

Hello All,

This is my first post on this site. Found it about a week ago and have been reading it non stop. Its full of good contributions, thanks! For the founder I bet you love the adsense income. Now thats a nice passive investment!

Anyway, a little bit about me before I ask a few questions. I am 28 years old and currently live in Germany. I just moved here from Georgia about a year ago as I am military. Currently I have a house in Georgia that I tried to sell but ended up renting out before I moved. It completely does not meet MikeOh 50% rule :)

A few weeks ago a friend called and he passively said he was looking to buy some rentals in Georgia and wanted a partner. I had not looked at the mls listings since I originally bought my house in 2003. All I can say is, wow. These things are really on sale. I've been constantly looking at various listings and see lots of deals that would appear to meet the rules touted on this board.

One I was considering:

Listed: 52k
Year: 2002
Estimated Rent: 850 - I found only one rental listed in this smaller town and it was actually the same exact design.
Construction: Aluminum/Vinyl

I just got off the phone with the agent and she says the owner is an older individual whom has had the property on the market for 6 months. Supposedly it is in perfect shape. From the conversation I believe he originally bought the property to flip it but has had issues. Now just waiting on her to send me many photographs as I cant easily look. If I like what I see have a friend check it out.

The numbers to me seem to work. I have been pre-qualified from USAA for a 5.3% investment loan. If I picked up the property for 45k + 3k closing and had a 38k loan the mortgage should be about 211.02. Other numbers I estimated:

Maint: 15% - 127.50
Mang: 9% - 76.50 (thats what the local PM seem to charge)
Vacancy: 15% - $127.50
Tax: 10.59% - 90.00 (Guessed...)
Insurance: 4.71 - 40 (Guessed Again!!!)

That comes up to about $461.50 a month in expenses or about 54.29% of the rent.
$850 (rent) - $461.50 (OE) - $211.02 (DS) = 177.48 Cash Flow

What do you guys think about a deal like this? Also, what do you think about the aluminum construction. I have never heard of that before. From the pictures I would think the house is completely normal. At least it does not look like a trailer lol

Thank You