Returning to Investment Properties

[John C.]

Hi everyone. I am still a new investor and have been away for a few years after a bad experience/good learning experience on a previous SFH rental.

Anyway, I have a potential new construction townhome deal and the numbers look good (if I don't factor in repairs, capex and vacancy). However, after 20% down I have about $20,000 in a reserve brokerage account that I plan to use for this and future properties (will be adding to it over the coming months/years).

Rent will be approx. $1400 (potentially $1500) with a CoC return of 6.5% and cash flow of $246. I don't have any need for cash flow at this time so this will be a buy and hold with all cash flow going back to the property in order to build capital/equity for another purchase in the future.

I feel this is a good deal for my situation but I am a bit gun-shy.

On a side note, this is area is a potential landing spot for my wife and I when we leave California in the next five years.

I am sure I am leaving out some details (unfortunately I don't know what I don't know). But hoping someone can offer some advice or additional information for me on what I should be focusing on or not focusing on.

Thank you and I look forward to hearing from you.

- John

[John Underwood]

I don't think new construction is going to be the best choice. I personally would look for a motivated seller or distressed property to get a good discount off the ARV.

"You make your money when you buy"