Found a bank owned house for 21k

[Felix Krull]

I ran a screen and came across a 3/1.5 1130 sf house. I've played with some numbers and I figure with 20% down with a 4.75% note I would only have a monthly payment of about $100.

I looked the property up on the county pa's site and it last sold back in '05 for $75K. Now, just from the little research I've done I know that bank owned properties are a different animal so I am seeking some collective wisdom as to how I should proceed with this potential deal. My goal is to turn this into a positive cash flow property.

The house is located in the low income side of town, so there are obviously issues with its age, amenities and some minor crime. However, and correct me if I'm wrong, for a house that big I don't see why I couldn't get at least 2%, if not 3% monthly income.

Since this is potentially my first investment deal I want to tread very carefully and conservatively. What do you all think should be my next steps in progressing towards a deal? Other than obviously going to see it in person. Thank you very much for your help in advance.

Felix

[Kevin Yeats]

There is a MAJOR DIFFERENCE between buying a penny stock and buying a cheap piece of real estate.

With a penny stock, you get the market's repricing (revalueing) that asset (almost) everyday ... in some cases by the minute. If you made enough paper money, a few clicks and you have the real profits. The CEO of the company does not call and say the roof leaks or the water heater is our or the county does not send a letter requesting money.

Those phone calls can and do happen with a rental property. You have NO IDEA what the value is until you get an offer.