Am I crazy?

[Dan Dunmire]

Hello BP, and thank you for such a great site and community!

I have never bought real estate before, and so I have bought many books on the topic (even "The book on rental property investing") which is what first brought me here some time ago. I have been saving money for my first purchase and though my goal/plan was to wait until September to enter into the market and buy, I have recently found a property that has been on bee on the market for over 4 years. It first went up after the owners passed away in 2012 for about 8k less than its value at the time; long story shortened it never sold. This year the price was dropped down to 5,000 dollars, cheap I know. The house does need, well everything. There is mold, bad roof, smell, old electrical, walls are beat to hell, and the list goes on. I had at the time decided to run the numbers on the house as a test to see if it would cash flow given that the areas rates for rent were so low, and after listening to "The book on rental property investing" a few more time, I crunched the numbers and found that the ARV would be so high that after the rehab that I could get an equity lone and get all my cash back from the purchase and rehab costs with an extra 8k on top of that. I made an offer last Friday and spoke with the duel agent today, she told me that they will most likely accept the offer, the only thing stopping them was me showing the proof of funds. Needless to say I already spoke with my bank and the bank send they were sending it within the next 3-5 business days. This is all really exciting and scary at the same time, am I crazy for doing this?

A few options I've thought about is no getting a home equity loan (not by choice, more like an exit strategy) and just renting it out, it will cash flow for about 200 dollars this way.

Or, if everything goes to plan it will only cash flow for 100 dollars.

My finial exit strategy would be to sell the house and make the 40k that was made from the forced appreciation, but then I would have to pay taxes or do a 1031.

I feel like I done a great deal of research, and I know I don't want to over analyze and if I don't do something soon I might not at a later date for whatever reason, but am I jumping the gun? I hear all the time in the podcasts that the biggest difference between success and failure is taking action, should I just say to myself no matter how this turns out I'm just paying my school fees?!

I guess I just want to hear what others more experienced have to say.