Cash Flow - Need help figuring out. I am new.

[Rey Martinez]

I am new to investing. I am looking to get my first property out of state. Im looking at a property using a 20% down conventional loan and my all in cash is 45K and cash flow is $370- $400. I've heard Brandon talk about getting at least 12% COC. But this is about 9%. Since I am new, how strict should I stick to these rules? Also - this market is crazy - seems like most people are waving inspection to get approved. I would just like someones thoughts on this.

Thanks  

[Erin Glosson]

Hi Rey, welcome to real estate investing! I'm going to weigh in on waiving inspections. My real estate agent (also a real estate investor...thanks, Marcus Auerbach!) shared his perspective with me when I was purchasing my first two properties in this market. (And I did wave inspections on both.) As you look at the condition of the property, break items down into cost categories: potential cost 10-15K (roof, plumbing, electrical, etc.), potential cost 5-10K (furnace, air conditioner, water heater, etc.), and cost less than 5K to repair/replace. This way you can determine what kind of risk you're taking if you wave the inspection, and can estimate possible out-of-pocket costs. Assigning numerical values like this  made waiving the inspections less scary for me. Wishing you the best on your first deal!