First deal all sorts of F'd up

[Juan Carlos Castillo]

Some of you may have seen my previous posts but anyway I've been looking at buying my first property in South Florida (Fort Lauderdale Village Area) for $225k with current rentals at $2250, and a possibility of bumping it up $2500.

Since the beginning I've gone through tons of bumps along this search. I started looking September of last year and after finally finding something I liked, my loan was denied, the broker told me to wait until March so the late payments I had made in 2015 were erased from my record.

After starting the search back up in April, I go to put an offer on a property and same thing.

Last month she said I was finally approved for a loan and to start looking again. I found this duplex in a neighborhood thats without a doubt going to appreciate (my fraternity brother is in the city's development department and has sent me redevelopment maps of the area). But when I went to do the appraisal it turns out the house only has one water meter and isn't officially a duplex like it was listed.

The mortgage broker now says we will need to open up a door between the two units and remove the kitchen from the efficiency in order to be able to continue with the loan/closing.

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I'm quickly starting to lose hope on this search and feel extremely bad for my realtor who has stuck with me since September. He believes regardless of the situation it's a great deal and I should stick it out. My parents say I should back out, take the loss for appraisal and inspection, and put my savings towards the remaining balance on my student loans. And the mortgage broker says from her pov I am entitled to be refunded my inspection and appraisal costs.

I really want the property but am worried about having to practically renovate the efficiency/in-laws den and having to find new tenants (previously the tenants stated they both wanted to renew their lease).

What should I do?...

[Jacob Sampson]

@David Santana I do enjoy hearing about investing in other areas of the country.  I just don't have the stomach for those examples.  The cash flow margin feels so slim.  It seems as though you have to bank on appreciation of the asset for most of your return.  Is that true?

As an example I consider true long term cash flow to be Gross rents - 30% (vac, maint, capex) - PITI = longterm average cash flow. With your numbers above combined with my definition the cash flow seems thin.

Thoughts?