Need advice on this potential deal!

[John Quiroga]

Good morning BP community!

My name is John and this is my first post on this great network. I have done some reading on this website and there seems to be many different types of advice. I have read the two BP books advertised on the bottom right of the site and I am highly interested in being a true member of this community. I am a military service member which just came off active duty and I am looking to invest into a small apartment, condo, co-op as first property.

I have come across a deal which I am not sure about. A friend of the family is interested in selling a property in Valley Stream, New York. It is a 800 sq ft condo located next to a train station (LIRR). The owner purchased the unit for $50K about 10 years ago and is looking to sell for $60K at the moment. After receiving a quote from a trusted contractor, the condo will need about $15K in repairs to bring it up to date. I currently do not have $15K in the bank to drop on repairs but I can get a loan for the $60K for sure. There is currently two similar units of the same size for sale at $89K and $100K and a foreclosure for $65K (147 days on market). Recent condo sales in the same complex include $65K (2013), $71K (2013), $75K (2013) and $105K (2015).

After much reading it seems that a 203K loan might be my only option. What should I do? 

Thank you in advance for your replies and help on this matter.

[Cole Swartz]

Based on local comps, what do you think you'll be able to rent it for after you fix it up? You intend to rent it out as opposed to flip it? Besides debt service, what other expenses do you foresee (Cap Ex, Maintenance, Vacancy, Property Management, HOA fees, etc)? Based on these numbers, what do you expect to be your cash flow?

The two books you are referring to are The Book on Rental Property Investing and The Book on Managing Rental Properties, correct? You should then be able to do the above tasks pretty easily and will better enable folks here to critique your deal. 

I would also get a familiar with the condo HOA before jumping into this deal. Some folks here tend to stay away from condos because of the unpredictability of the HOA. On the other hand, some folks build their whole strategy around condos. Just be aware that when dealing with condos, a lot of time the HOA is an extra variable that you need to pay extra scrutiny to as a few bumps in the fee can quickly eat away at your cash-flow.