Please Evaluate this deal....

[Brandon R]

900 Sq.Ft. 3/1 on slab with 1.5 car garage in prime school district. Asking 24,900, owner purchased for 15,000 1 year ago. No major improvements. Home is in average condition/rentable. Mls indicates owner needs to sell. I would pay no more than 20,000. (if that is a safe purchase price) The home would be worth around 35,000 if it is updated. Not much maybe 5,000 high end.
House currently rented for 400 per month.
Taxes 60.00 per month
Insurance 20.00 per month
I am required to put 20% down and my bank charges me 7% over 20 years.
Any suggestions would be appreciated. After looking and looking this seems to be the best property at the moment.
Thanks....
Brandon

[Rich Weese]

Brandon,
I'm not quite as negative about this property as other replies. You didn't mention enuff info in my mind.
1. Are you trying to buy and hold?
2. Are you thinking of flipping?
3. Will this be an institutional loan? If so, it will count as 1 of the 4 allowed by nannie and freddie.
4. I'm assuming this is investment and not to move in?
5. Do you need cash flow at the present time or just trying to acquire Long term investments?
6. Will all the cash flow you receive be free of paying income tax on?
7. Have you estimated repairs before? If not, you may be surprised at the actual rehab.
8.Is this an older property?
Those are some of my thoughts,fwiw. Good luck on your decisions.