What Is Your Risk?.

[Derek Nemec]

I am VERY interested in your risk assessment and I'm looking to gather information and from your experience, help the decision be made. Thank you for your thoughts.

3 properties: a 3b/1.5 bath home, a 1/1 garage apartment with 3 garage spaces below, and a 1/1 fully furnished small (500 sq ft) home. Each of these have their own lot and backyard. Central HVAC as well. The market rent puts all three together at approximately $2900 monthly.

Costs behind the acquisition:
Property taxes: $5000 yearly
Insurance estimate for all three: $3,300 yearly
C-class properties (not best location, their condition is about average - older properties)
Purchase price: $250,000k
$15k down and $235k seller financed at 6% interest for 30 years. 5-year PPP.
For your summarized review: PITI came to $2100 monthly. Total rents at 100% occupancy across the three are $2900 monthly.

I'm thinking because the financing terms are soooo attractive that it may be worth the higher risk that comes with the high PITI? What are your thoughts on the risk? What do you use for your numbers?