1bed/ 1 bath-12k-would u buy it?

[Chris Wood]

I recently was given an opportunity to buy a 1 bed/1 bath house from a friend. He has had a lot of success with these and prefers them.  Which is different than the other 95% of investors I have talked to. I have also heard that having several different types of real estate is a good idea. So I am curious why or why not would you buy this deal.

It is a 1 bed room house with bath. Totally rentable and should have a tenant shortly. Who would be locked in to a lease for 12 mos. It might be a c neighborhood. It does have a 1 car detached garage. House is about 600 sq ft.

Numbers:

Buy at 12k

Rent is 465/mo  (about 2 yrs to be paid off)

Ins about 300ish

taxes are 686/yr

[Kyle Alberry]

I am a new investor, have not completed a deal yet, but I want to give my 2 cents on this deal. Everything you have said to me just pops out as positivity. I do not know the area, I am just going by what you say, but there seems like there are many pros, and not too many cons. 

1. It is cheap, which means less risk and leverage on your part.

2. You know a guy in that niche, if something ever goes wrong and you need help, if he is truly an expert in the niche he will have an answer for you.

3. You said should have a tenant shortly, and for 12 months, which is a big plus since you do not have the place yet, and you may already have it filled. 

4. It's a 1/1 600 sq ft. That is good for capital expenditures(big repairs) and even small maintenance. Less sq ft of carpet, smaller roof etc. 

5. Paid off in 2 years? That's awesome. Extra $5580 per year when it is paid off less vacancy/repairs/reserves.

There is just one question, and this can be a con, but why is he selling? Is he a close friend and wants to build your portfolio with some cashflow? Is he liquidizing some of his portfolio? Is there any latent defects he may not be telling you? If the reason why he is selling is negative regarding the property then I would try to see what it is and see what it would cost to fix, then go over the numbers again. If it has nothing to do with the property in a negative way, I would lean towards making the deal. This is just my opinion though, and I have not owned any property yet, just trying to help!

Let us know what you decide to do!