Any investors in DC?

[Shannon Bullock]

My brother is selling his 1 BD / 1 BA condo in DuPont circle to move out of the city. He has given me the option to purchase it. He only owes about $330k on the existing mortgage and is planning to sell at $435k. Unfortunately I would need to purchase through traditional financing  with 20% down since he needs the proceeds from the sale to buy a new place rather than taking over his current mortgage. I’ve heard many people say that DC is a hot market and should have good appreciation, but based on my calculations this condo would have negative cash flow of about $500/month. At first blush it seems like I should pass, but am I missing something? Should I consider factors other than cash flow? My strategy is to buy and hold but it still seems like a bad deal with such negative cash flow. Any thoughts?

[Russell Brazil]

Thanks for the tag @Caleb Heimsoth.

@Shannon Bullock Something in that price range in Dupont is going to rent in the $2750-$3000 range generally depending on a few different factors...specific location, amenities, niceness, etc.  Before condo fee you are looking at a payment on that of $2100...so then add the condo fee onto that....so there is little reason you should be ending up at negative $500 per month unless its some crap building with a $1,000-$1500 condo fee or higher. And if so, then those high fee buildings are not ones you should buy.