Purchasing a 3 br/2 bth SFR as first investor home.

[Elizabeth Ruth]

Hello there BP,

Noobie here. Love this site and so glad a cold call, in answer to a FSBO sign in BR, led me here!

This is where we are currently. First time investors and DON'T want to move out of our home. Love our neighborhood and know that renters do, too. With that said...a property went up for sale and we would like to know if this is a bad/good/great deal.

PP -  $143K  - w/seller paying $4K for CC.  It is a 3br/2bath. Built in 1978.  A/C unit is 9 yrs. Needs a new water heater, stove on last leg, as is DW, but EVERYTHING else is updated. Roof 6 mths old; tile floors, laminate and carpet all new within last 2 mths, freshly painted throughout and ready to move in within a few days of closing.

It was a rental, tenant passed away after 15 years. Renter paid $1500 month and that is still the norm (minimum $1400).

GREAT location: School, shopping, Interstate all within 3 minutes...but a one way in, one way out subdivision serving only local traffic. Quiet within, but total convenience without.

We want to take out the equity in our home to put 20% down on the new property. We currently owe $97K and our house is currently valued at $147K. However, two years ago we did a major remodel of our kitchen - $15-16K - and more recently have updated our bathrooms  - $1000-1200 - (new toilets, floors, fixtures). We will have an appraisal done for the refi- cash out, and thinking it should be $155K ($8K - which is less then 50% of remodeling value). (I realize that is VERY subjective).

Did crunch the 2% rule, the 1% rule and the 50% rule. We're right at the 1% and that's ok with us.  Not looking to get rich from this, but would like to pursue if the numbers add up right. Otherwise, willing to walk away.

Our rates for refi cash out w/b 30 year, 4.375% (presently 3.625 on a 15 -12 remaining- but willing to do that) and investor rate for new property w/b 30 year, 4.875.

Thanks so much for helping the new kid on the block!  :)