First rental Property

[Michael Baradell]

Hey all!! I have my eye on a 3/2 SF 1748 sqft. Details: home is completely gutted and will require $40-$50k in renovations. My target purchase price will be $20 to $25k. ARV will be around $90-100k based on most recent sold comps. I plan on holding the property permanently. The rental market is solid and I will be able to get between $1000- $1100 a month. Financing: 20% down on purchase price, 100% financing for rehab costs on a 12month interest only loan, will refinance after rehab is complete. I am not familiar with this type of loan so any insight will be helpful. Does this sound like a solid first property to the BP world? Thanks for any comments.

[Michael Baradell]

Thanks for the comment George. Whould you mind explaining how you came to that conclusion? Worse case scenario, I see the total carrying costs at $700-$750 with minimum rent at $1000-$1100. So, with those numbers I am figuring a cash flow of at least $250 a month, minimum. I am confident I will be able to rent it fairly quickly for $1100 however. Feel free to point out any errors. I would much rather learn of a mistake on BP vs the real world.