Speculative vs. Monthly Cashflow?

[Jose Corbera]

Hi All,

Here's the deal... I'm looking at a second property which is a somewhat updated duplex in the Miami in an area that may appreciate substantially over the next 15 years. For those that are local, it's on the north side of the Miami river between the Miami Marlins stadium and the Miami International Airport. The details are as follows:

Purchase Price: $350,000

Monthly Expenses: $2,582.61 (Duplex is in a flood zone since on the river, where by my insurance is $6835.92/12 = $569.66)

Monthly Cashflow: $317.39

Total Cash Needed to Close: About a $100k

Cap Rate: 5.99%

I'm torn because although the property is in a great location, doesn't need work, has current tenants, and has plenty of speculative value, I will have a $100k parked until the property appreciates, not to mention the below than average monthly cashflow. My initial thoughts are that opposed to having a $100k sitting and not really creating monthly cashflow for me, find a different property, perhaps with less speculative value and more monthly cashflow.

What are your thoughts? Thank you in advance.

Jose

[Jose Corbera]

@Matt R. and @Mark Bookhagen Thank you gentlemen!