Purchasing First Investment Property

[Oraude Boston]

Hey Bp, Good Afternoon. Hope Everyones Having A Successful Day. I Have A Question.... I Came Across A Potential Deal That If Purchased Will Have Built In Over 90k In Equity. But Doesn't really Cash Flow Until the 3rd Year Of Ownership Based On The Financing I'm using. Im Pretty Much Breaking Even On The Cash Flow Side of Things. I Plan To Use A FHA Loan To Fund the Deal With No Additional Repairs. The Property Will Be A SFH and Already Have a tenant That Is Interested in Renting. Would Investing Into A Property Based on Equity & Breaking Even on Cash Flow A Smart Idea?

[Rob Beland]

For a SFR you want to be sure you have at least six months of reserves in the bank in case you have a non-paying tenant. This is not money you would use if you need to replace a hot water tank. Also, 90K in equity over three years would be relatively meaningless on a million dollar property. Can you give more details on the financials? If you're talking about a $300K property its a different story.