Does my deal make sense?

[Mike Sangapore]

Hey everyone,

I am currently under contract with a seller for $50k cash as a long term investment. It rents for $900/mo but will need a lot of work in the future. It is definitely livable (hence the renter) and in good enough condition to *hopefully* last a few years without any major issues. However, EVERYTHING would need updating to get it to 'retail value' which seems to still be only around $75k. The roof will need to be replaced in the next 10-15 years as well. The properties in the area aren't going for much more than about 75k so BRRRR'ing would not pull much of my equity out by the time it got to that point. That being said, I'm looking at this primarily as a (seemingly) good cash flow opportunity - improvements would be modest if/when they occurred. The seller and I have great rapport but she is unwilling to sell for anything less than $50k (and no interest in seller finance). I can provide any other useful information if necessary - I just thought I'd get the opinion of the BP community. I don't have much hope in this deal and my eggs aren't all in this basket! Let me know what you think.

Thank you!

[Bill B.]

In many areas “the roof needs to be replaced in the next 10-15 years” means the roof is brand new as they often only last 10-15 years total. If you’re sure you can sell it for $60k and you don’t need a new roof for 10{ years you probably won’t lose money unless it’s a bad neighborhood. 

You need to add your location to your profile and/or this post so local experts can weigh in low cost properties are often high risk because repairs can be a higher percent of total value. Like a $2,000 used car needing a $1500 repair versus a $50,000 used car needing the same repair.