Would you take this deal? (OBX/NC)

[Brandon Wang]

Hello, new to the site but I saw a similar post from a couple years ago and thought what he got was an amazing deal, knowing what I know now about the area. 

https://www.biggerpockets.com/...

Anyway, to my case - This is my first property, SFH under contract for about mid $800s in Duck, NC.

It's a slightly older property from mid 90s, with some deferred maintenance ($25k to replace polybutylene pipes within 2-5 years, maybe $5k of roofing in the same timeframe) but in generally good shape.  The current owners rent it out via VRBO, and grossed $95k last year.  They took a couple of peak weeks for themselves so I estimate they could have earned around $105k if it was fully avialable

I plan to put down 20%, with a interest rate of 5.75, hopefully lower if things work out over the next couple weeks, each quarter percent drop is another $100/mo in my pocket. 

The property does make the 10% rule where you want 10% rents/purchase price, at about 10.8-12.3% 

The town of Duck seems to be a more favorable location then most other towns in NC, more boutique stores and restaurants, not like the tourist franchise areas of KDH and NH, nor the deserted windswept dunes of Corolla or Rodanthe/Buxton in the south. 

From the expense side, I modeled using last years utilities numbers, ~$6k, pool main $2.4k, insurance from a new quote $6k, and a 5% repair reserve about $4500 a year.  Management will cost 16%, but I hope to negotiate this down to ~14%. 

My main concern is the timing of my purchase, I'm concerned we can see a significant nation-wide down-turn that has not materialized in OBX yet.  It's still a sellers market here, with very low inventory.  I don't know if this will change and we see a down-turn to the magnitude of 2008.  It seems that houses in this area are currently all renting and making at least the rental projections, but that may be due to the very high demand last year coming out of Covid. 

I can support this financially should things really head south, i.e. lose $150k in value and make half of the promised rents, but I'd much rather back out and lose my $3k fee now than do that.  Really could use the advice as this is my biggest purchase ever.