First deal: how to maximize ROI

[Account Closed]

Hello, new to real estate and need some advice on creative financing.

4/2 SFR built in 2005 (pool and screened-in patio included) just came on the market. Desirable neighborhood with great schools. Comps average $230K without pool and patio. Motivated out-of-state sellers tired of renting and asking $259K. Potential rents $1400-1800. Operating costs (pool, lawn, insurance, taxes, prop mgmt) are $800/month. I can cover the 20% down but wondering if this is the best way to proceed or if I should proceed at all.

What would you suggest in terms of offer price, debt services, and creative financing to maximize ROI?

Thanks so much for the help!

-Kevin

[Brandon Turner]

Hey @Account Closed welcome to the site, great to have you here! (be sure to introduce yourself!)

Personally, I don't see a deal here. I mean, I guess it depends on the strategy, but pools are generally a liability for most people (especially landlords) so paying over-the-norm for something like that seems dangerous. Plus, I can't see that property cash flowing, ever. I mean ,it might look good when all you are thinking about is the Mortgage payment, but consider 10% vacancy (plan $150 per month) Repairs (Plan $100 per month), CapEx (Plan $100 per month) Management (plan $200 per month), Insurance (Plan $100 per month) Taxes (Who knows... Maybe $300 per month?) And then add the mortgage. I bet if you ran this scenario through the Rental Property Calculator you'd see some crazy bad returns... give it a try and let me know!