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Updated over 6 years ago on .

User Stats

24
Posts
5
Votes
Price Paramore
  • Rental Property Investor
  • Spokane, WA
5
Votes |
24
Posts

First deal (potentially) for a Self Directed IRA Portfolio

Price Paramore
  • Rental Property Investor
  • Spokane, WA
Posted

I have made it a goal to get into RE since Nov of 2017 when I came across BP and I have been steadily working towards it ever since. I live overseas so it has added some complexity and additional time to the process. After returning home from a deployment in Feb, I immediately decided to turn my IRA into a Self Directed IRA and use the money to get started in REI. I have since switched to pursuing MFH as my long-term goal, but I am eager to put my SD IRA to good work while I am researching and working with coaches on my MFH pursuit. Long story short I have a potential deal for my IRA that I am looking at.

Here are the figures: 

Area: North Phoenix (North of Phoenix Mountains Preserve)

Condo, 2 beds, 2 baths at 1134 SF

Sale price is $112,000

Downpayment is 10%

P&I is about $510, Other expenses (Vac, Cap ex, Repairs, HOA, PM, Ins, Tax) is $583 for a total of $1093.

Now for the rent...I have received 3 different quotes from 3 different PMs. One at $1000, one at $1100, and one said potentially $1200. The $1000 figure comes from my chosen PM for the property.  I trust his insight on the rent but have questions if the condition of the condo will cause an increase in the price.  The condo is probably one of the best in the complex. It is newly renovated with stainless appliances, tile and wood floors, designer stacked ledge stone, glass & stone backsplash, crown moulding, upgraded lighting, ceiling fans and an updated washer/dryer combo. Also, the way they designed the condo it has a door to the vestibule which connects the 2nd bedroom and bathroom. Closing the door turns it into a 2nd master bedroom.  It is a nice feature.

Here are the comps that I have seen. There is another 2/2 in the complex for $1100, and two more 2/2 with the rents of $1075 and $1150 in the area. I have found other comps that are 1 to 2 years old that list townhomes, that are 2/2 with 1200 to 1300 SF, for $1050 to $1210. 

I have a feeling that I can get $1150 to $1200, but with the wide range from the PMs I am not for sure. My realtor says that it would easily rent for $1100 based on his personal perspective. If I rent it for $1100 I break even but if I get $1200 it brings me to the $100 cash flow that I was looking for. 

I am trying to decide if the juice is worth the squeeze.  I have been looking in the Phoenix area for 3 months and this is the first potential cash flowing property that I have encountered.

Any advice or perspective would be appreciated. 

  • Price Paramore