Help on property investment

[Drew Simpson]

I just want to say i’m a complete novice and new to this. I’m expecting some type of criticism for not understanding or maybe l do. I’ve always heard of people flipping houses & know of family friends who own a decent amount of real estate. Now lm looking into this one property and maybe totally confused but it seems like such a win win.

I found this Forclosed property on Hubzu.com for $549,000 asking price.

5 bedroom/4 bath

5,450sqft

.5 Acres

Backyard lake

Located in South Florida. Looks gorgeous. May need some work looking at pictures not much.

Anyhow I was looking at homes renting in the area for an idea and found a 4 bedroom/5 bath 3,500 sqft renting for $11,000 that last sold for $780,000.. The general renting price in the area is around $7,000-12,000.

So let’s say l put 20% down on this house for $110,000 with a 30 year fixed mortgage. Paying around $4,000 a month knowing obviously i’m not gonna mortgage it that long. Put around $20,000 into it. Rent it out for a minimum of $9,000. That is $108,000 a year. It take around 4 years to pay off the remaining $450,000 of the house or not? I could then sell it or now rent it out for profit?

So l invested $130,000 +/- for a return in 4 years.

I know that doesn’t include other small fees & factors but it’s just a rough estimate..

Again if l sound like a complete idiot i’ll go ahead and delete it but if so someone please explain what i’m missing?