$175 cash flow but CoC 3% - Would you buy?

[Charlie Anne]

I am getting to be “too close” to this deal so... would you invest in this?

I’m already under contract but can back out during due diligence.

-118k price 

-7.5k closing costs (so high!)

-20k repairs

= $145k all in

-ARV is 160k

-Rent $1350

-$175 cash flow/mth

So all in all there's low CoC at around 3%. Requires $51k out of pocket. The area appreciates quickly.


I suppose my hesitation is that it requires a lot of work to renovate and maybe my $50k could be more efficiently used elsewhere. On the other hand it took me forever to find a deal that cash flows. 

Would you buy this house?

[Darius Ogloza]

Really does depend on your strategy. Not much room for a flip here as ARV - purchase + repairs pretty much gets eaten up by the sales costs. Cash flow is actually 4.1% [($175 x 12)/51,000] which isn't terrible if your strategy is to hold a few years for potential appreciation. How solid is the $20K repair number? If this fully loaded or a rough guess? Can you beat 4% return for the same level of risk elsewhere seems to be the question.