Need a Push to Buy First Property

[Beau Shaw]

Hello, I have been reading, listening, and learning for a couple years now.  I am 43, married with two young kids.  The goal is to retire when my youngest graduates High School in 10 years.  My wife is on board.

I found a 6 unit that a retiring landlord is selling.  It is in a small town near where I live in central Ohio where the economy has been doing ok for the past several years, it is in a decent neighborhood.  They are asking $159,000, but his agent has told mine that they would accept $140,000.

Over the past 3 years, the expenses have averaged $10,393 a year.  There was a one time large repair of the majority of the windows for $6000 bringing that average up.  Removing that they averaged $7055 the other two years.  I would be adding $2300 in management fees and approximately $9000 in debt service (assuming $140,000).  They are going to need a new roof in the next few years.  A very rough estimate for this is $10,000 to $15,000.

They have been running over 90% occupancy.  Rents averaged over the last three years are $22,831.  The company I would use as property managers thinks it is under market value.  They think it should be from $29,880 to $31,800 in rents.

I am approved for a loan from a small local bank on the $160,000 with 20% down (I have in cash) for 6.2% adjustable in 5 years and a 20 year term.

I feel good about moving forward at $140,000, a little nervous about $160,000.

I am ready to call my agent and make an offer but I just need some conformation that I am not crazy and some butt kicking to move forward with it.