Should I buy this house?

[Erik D.]

Hi all,

I am a fairly new investor. I have two properties, both in Minneapolis. I rent them out, and so far, it has been great. The two properties are condos, which I like because the associations take care of building maintenance.

I came across a home that was purchased in 2004 for 180,000 and is for sale now for 35,000. I want to buy it, rehab it, and turn it into a rental. It is a short sale, and it looks like the place is trashed. I would be willing to spend $15,000 on rehab. I would have a general contractor do the work.

It is a 2 bedroom, one bathroom. The house is 1,268 square feet, and the lot is about 9,500 square feet. Because the lot is so big, and it is a corner lot, that puts annual taxes at 2k.

There is a railroad track behind this home. Year built is 1900, it is old. There is also a 2 car garage that looks in rough shape too.

I estimate that I could rent it out for $950 to $1200.

I would need to finance this though. I could get a mortgage or go through peer to peer lending.

Does this sound like too much of a gamble?