Paying full price, yes or no

[Chris Shuptar]

So, I am closing on my second deal on December 28th. It's a 2 bed 2 bath townhouse in a desirable area. It was obviously a flip for someone else because literally everything is brand new and mint condition. I've checked the comps in the area and the $109,000 asking price is right on par. Here is the thing; due to the top quality of the school district, it's very common for people to rent or buy properties around here merely to have a mailing address. They typically live just out of town, but if they have a mailing address within the school district boundaries, they can send their kids to the good schools. With that said, I have people contacting me to do just that. They are willing to pay $1400/month just to basically just say "they live there". I'm paying $109,000 for the place (full price). I walked into nearly $30k of equity with my first deal... but on this second one, I will essentially have no immediate equity. Is it worth the nearly $600/month in cash flow? I know most of you always look for crazy deals... but at what cash flow do you abandon your typical formula and pay full price for a property?