Anything wrong with this deal?

[Greg Shelburne]

This 2 BR house has been well maintained in the West End of Louisville and the seller is asking for $18,000. Houses on the same street average around $50,000. It will rent for $600 on section 8. Thinking of making an offer of $14,000 cash. It's in the "hood" and I have experience renting on section 8 in that area. My goal is to obtain 5 houses all free and clear, cash flow $500 per month after insurance and taxes. I have 1, 4 to go! What do you think? Posting below.

This home is located in West Louisville and is a must see. Home has new roof, windows, and security system. There are plenty of closets and a cellar area for additional storage. In addition to all of this, home has a detached garage with a sidewalk leading to it. Fenced in backyard with patio great for entertaining. Home has been well kept.

[David P.]

@Greg Shelburne this sounds like a great investment if you are comfortable with this type of area. The 2bd room doesn't bother me as much as you maybe able to rent to an elderly couple who also doesn't mind living in that area.

I would maybe try and do a lease option to purchase on this property. Even if you get it for $16K, ask for $5K down payment and hold the note yourself. This will give you a steady stream of revenue and more importantly they take care of the property and you can probably sell it at current market to them and make even more upside.

Additionally, if figure how long it would take you to get all of your money out of the deal and let them purchase at that time; say 5 years. Then you can do a 1031 Exchange and purchase in better areas that will be your hold properties.

The nice thing you have many options with this one; and it is not going to break the bank.

Good luck,

Dave