I probably overpaid a little......Now what?

[Derrick Carpenter]

Background - This was my first rental property. I purchased a SFH in Raytown, MO last year for $50K and did about $4K work to get it ready to rent. I was able to rent it out in about 1 month and I am getting $800 per month. Cash flow is good, making about $400 per month after putting money away for repairs and paying all other bills. Tenant is great and no major issues.

So, after talking to other investors and looking at other properties, I probably overpaid a little ($15K) for similar properties.  I need to do a little maintenance on the roof and foundation, but it will be funded out of the repairs budget that was paid for by the rental income.  My question is, should I continue to hold onto this property and make repairs or, should I sell it and probably break even and consider it a good lesson for my next purchase?

Let me know your thoughts or what you have done in the past.

[Rumen Mladenov]

@Derrick Carpenter +1 for keeping it. I was in a similar situation a few years ago, trying not to overpay on a property with an asking price $45,000 that I figured was worth $40,000, would rent for $850. Seller lowered to $42 k, and I insisted on $40k.

Another investor bought it. Then the distressed inventory dried up, and similar houses started selling for $60k+. I am kicking myself now...

If the property is cash flowing, it is a good deal - you will have cumulative cash flow and when it is paid off you will have it free and clear. The biggest mistake would be to sit on the sideline; getting a good deal instead of a great deal is still a win in my book, especially for a newbie.