Need advice on buying my first investment property

[Chris L.]

Hi there. Interested in buying my neighbors home as my first investment property. It’s a highly desirable area and homes sold relatively quickly -pre pandemic. I have not bought an investment property before and am looking for some input on the following:

1. The owner has a friend that is a realtor that will be handling the sale of the property and I have been communicating with them but they are not providing a price and they are not doing an appraisal. They are selling as is but letting me bid first. Just wondering what steps I should be taking for this purchase. I am thinking I should bring in my own appraiser, inspector and contractor to give me some insight into issues, pricing and cost of repairs. Anything else or what do you recommend?  Is there an online service that would give me a ball park figure on what the house is worth, before I go into getting an appraiser etc? How do i determine how much I should put into the home before renting or selling and how the rental market is doing for homes?

2. I am wondering if this is a bad time to be purchasing a property or if COVID hasn’t really impacted this area. I have folks calling me all the time trying to see if I will sell my house so I assume it’s pretty good here. Houses tend to sell pretty quickly but I have noticed in the past years that it’s the houses under 300k that sold quickly and those above sit a little longer but prices have gone up so much here that I’m assuming that has changed.The house is probably around 300k. 

3. Is the price range too high for a rental-probably 300k? My hope is to eventually sell in the future but for now I thought of renting. 

4. I’m wondering about the rental market for a 3bedroom home and if COVID has impacted landlords here. A concern is that the tenant will not be able to pay their rent in this COVID climate. What is happening right now with regards to rentals in the area and what happens if the tenant does not pay because of COVID?

5. Would you pay cash or get a mortgage on the home? What approach is better. Can you pay cash and then get a mortgage at a later time? Thought while I was having repairs done that it would be better to not be paying mortgage interest but also don’t want all my funds tied up in a home. 

6. Please share any input or suggestions for a first time investment property buyer. I have a disability and am looking for a way to use existing funds to make further income and I thought investing in property would be a good option.