Offer Accepted - My First Investment Property. I'm scared now!

[Lisa Goodwin]

I've been making offers on short sale properties for two months now. Yesterday I got an acceptance.

I don't have any real estate trainings, all I know is what I have learned from my father who retired at 45 after doing real estate for 20 years.

I'm buying this property in Suprise AZ for 100K. It needs new carpet, painting and landscape. After all is said and done, I'll be out $107K-$110K and it should be apraised for about $130K.

Here is my plan and please let me know what you think of it.
Finance the house and get my $107K out after I have a tenant in and move on to the next property and continue doing the same.

I have a business that is doing well and I don't need to be making money in real estate at the moment.

I am going to form a real estate LLC and as long as the LLC breaks even I'm happy. So, if the rent covers the mortgage, managment, maintanance, taxes, HOA and etc I'll be happy. My goal is not to invest any of my own money into the LLC, just build equity for future.

When the market recovers, I plan to sell all the properties and get into commercial real estate, maybe an appartemnt complex and if the cash flow is equal or more than my current income I can retire then :)

I'm very excited and scared at the same time.

I look forward to reading your inpusts!

[Levi Gale]

Well not sure what part of Suprise it's in, but you may be able to save some maintenance costs if your in the newer area. At least that's something to look forward to. I think you can find that type of "deal" very easily here, but quite frankly I think I would pass on it. It's your first investment home, it's in a different state, and your numbers really aren't that great (of course I could change my tune with more details). If you are willing to invest out of state, why not get a decent return?

I don't hit 50% on my rental expenses, but I also don't use a property management company. If you do I would still expect you to keep expenses under 50%, especially if you are in the newer area. In my opinion you can do better than that here, but make the decision that best suits your strategy.