First Investment Property

[Matthew Nilwon]

This is my first post. I'm trying to give background info here, sorry if I give you TMI!

We're 30 and we want to own rental property. My wife grew up in a family of property managers. Her dad bought nasty property, fixed it up, and sold it if it appreciated enough. He benefited from free labor for four kids. He owns 10-12 rentals at a time, and has owned close to 60 properties since the mid 80's. Hehas made a good "supplemental" income from this. My wife has leasing and eviction experience from working at apartments. I have minimal experience making some repairs myself and then managing others to make repairs; our current house had the potential to be a debacle but we did well, buying low, repairing efficiently, and now enjoying.

I'm looking at a property now in a Memphis suburb that is in an area full of new neighborhoods. It has a small house on it. I can pick the house and land up for $30K, remodel for $20K, and rent it for $800 a month. Insurance would run $600 a year, taxes $1200.

This is in a safe neighborhood - new subdivisions off the main road, and the main road this is on has a combination of new, large, nice housing and old country houses such as this.

My uncle is a successful real estate agent in a close by market (close by - not this market, which is why I'm not taking what he says as gospel) I could currently split the lot and sell the second lot (which would be more than an acre) for approximately what I'd pay for the entire property. I'm skeptical of this, yet within the past five years lots have sold that are slightly smaller, on this street, for approximately what I'm paying for the entire thing.

If a deal seems to good to be true, it normally is, yet I'm now in a house that was "too good to be true."

Thoughts/guidance? What additional info do you need?