Feedback on 2nd Buy & Hold???

[Daniel Dietz]

Hello,

I have been looking to add to the first duplex we purchased with our SDIRA that is doing well. I particular, I have been looking at doing a deal OUTSIDE of our SDIRA to have more flexibility and to be able to get financing instead of paying cash.

A business acquaintance knew I was looking and has a rental house he is looking to get rid of. He has had it about 10 years, manages it himself and is just looking to free up some time. He is considering doing owner financing or other creative financing to make it happen. The house is in a nice but modest area that is well located in a neighborhood of almost all owner occupied homes close to schools, parks, etc... It is assessed at about 70K and surrounded by homes that are 70K up to about 100K. It is occupied and the tenants would like to stay if that worked for us. He has not had a late payment in over 2 years from them.

He is willing to sell it for 55K (he owes about 53K) with at least a 5 year balloon, so we can get a couple of years of rental history and then refinance into a traditional loan of some sort. I am figuring 58K 'All In' The current rent is $700, but I feel it could easily be $850 or so, but I am basing my figures on $800.

The house has had new roof, windows, siding, water heater, and flooring in the last few years.

My rough figure are;

• 8800 Operating Income
• $3800 Expenses (only about 40% since all the recent upgrades)
• $5000 NOI
• - $4000 Debt Service
• = $1000 Cash Flow

Not quite $100 'per door', but I would also be building equity at about $100 a month, along with likely appreciation of $100 - $150 month. (I am not banking on this, but buying at a discount and being the cheapest house in a good neighborhood with a recovering market make it seem likely).

What I really like is the ROI and Cash on Cash

What your thoughts?

Thanks, Dan Diet