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Updated over 6 years ago,
Would this duplex be a good first buy for me in pittsburgh?
So i just started house hunting with my mentor/agent/ and yesterday found a duplex five minutes from my house.
At first i wanted to find a house i could pay all cash for (only up to 50k) so i could do the BRRRR thing. But this would require a mortgage. Here are the details, its listed at $95k, it is occupied, from photos and driveby it seems extremely well maintained, its on almost an acre lot on a dead end street, its rents for $1300 total, its in a good school district, kind of a lower middle class neighborhood. i did a rental property calculator app i have called deal check, it says 7.8% cap rate, cash on cash 11.5%, $200 cash flow (after 50%off and mortgage) worst case scenario i could pay the mortgage out of pocket. which makes me less nervous for my first property.
my biggest concern is the house is probably right around market value and the rents too. Also, there doesnt really seem to be a value add opportunity. it's not a BRRRR scenario. SO how do i get from here to the next deal. I have 50k right now to get started, so i will probably use 25k for down payment and closing etc. then ill have 25k left to keep going. i dont earn a huge amount of money so even if i save aggressively that would be only 500-700 a month at most.
so is this a good property to start with? my mentor (an investor much younger than me who has about 18 units she manages and works full time as an appraiser) thinks its a great first buy. but im looking down the road at how to keep the snowball rolling. i would appreciate any feedback or advice. thanks so much!