First deal...

[Shaine Cobb]

Hello BP friends and family,

For the last week or so I have been working on a deal that was going to the foreclosure auction. I have attempted to heed all of the advice given here and also from others outside the forum. After contacting the bank's attorney and doing my due diligence at the courthouse, I did a few drive-bys of the property, and all seemed well.

So this morning I pulled the trigger on a fourplex (quad) in my town. Each unit is 2/1. It is in reasonable shape, in a low to mid income area. It appears to be at least 75% inhabited, but that is about all the information I can gather at the time.

Similar units (there are several buildings together in the complex) rent for $500 - $600 with Section 8 paying at $525 for most 2br units.

The total purchase price was $41k of which I put down $2050.00 this morning, with the balance due in 20 days. I have the cash to pay it off, but wanted to start an LLC and take title in it's name instead of my own. After the LLC is formed (around $150 and 1 day's time here) then I will pay the remainder. Back taxes are owed and should work out to ~ $3800 total, city and county.

My intention is to keep the property long term. I plan to use a PM after I get all of the issues sorted out. I evaluated the deal looking at comps in the area (hard to come by), the 50% rule, the 2% rule, and common sense based on my personal situation, knowledge, and availability.

I would like to know what you think. Good, bad, whatever. I appreciate input, advice, constructive criticism, ideas, etc. What say you BP?