Thoughts on Subject- To Deal - Portsmouth, VA

[Brendon Bourne]

Hello. Trying to get some thoughts on a potential deal I can convert on currently.

Potential deal:

Location: Portsmouth 

Underlying Loan: 204,000 at 2.75% 30yr fixed rate. Current payment is $1,100 a month.

Details: 3 bed 2 bath 1300sqft 

Potential rent is $1500 a month.

Catch: There’s currently a broken water heater and a $7000 repair is needed on a sewage pipe in the front yard.

My thoughts:

The cash flow from the underlying loans low interest rate is the only reason I’m attracted to this deal but the upfront costs and potential capital expenditures on an older 1950s home may just suck out all the cash flow. Also this is an out of state investment and I’m not amazingly familiar with the Portsmouth, Virginia markets.

Any advise or information on the market would be appreciated!