Potential First Deal

[Bob Hollis]

Hello, 

We are considering purchasing our first rental property.  We have researched a variety of properties thus far and have not yet found one to our liking.  Family members notified us of a potential deal.  From a basic numerical analysis the deal would not necessarily be one I would consider, however the tenant has resided in the house for many years, is very dependable takes care of the house/property etc and plans on staying there for the long term.  Cash flow would be estimated 100-150/month.   Purchase price would be around 118k and current rent would be $1000/month (likely under market value).  This violates the 1% rule but would avoid costs with vacancies, property manager etc which allows the positive cash flow.   Of course, rental fees could be adjusted upwards to increase gains.

Any input is appreciated.  Thanks

[Bob Hollis]

Thank you all.  We visited the property and there are too many red flags/issues particularly given the price so will pass on this one.