Condo - What Would You Do?

[Drew Dim]

Would you make this deal?

So I have come across a condo that I am interested in as an investment property but want to know what others would do if in my shoes.

Specifics:

Asking price $55,000 (Has been on the market for some time and I wonder if a cash offer could very well get it down to around the $45-$50k mark (+or -).  So let’s say $55,000 out the door with closing which is about right when I ran the comps. (Not a realtor by the way)

This 1bed/1bath condo could realistically rent for $900 as others are asking $950.

HOA = $390 (includes electric and water etc so basically no living expenses besides internet/cable) Seems really high and I imagine it will only grow

Taxes = $110 (ball park)

Insurance = $50 (Honestly I have no clue, so I’m guessing)

Cash Flow $350 a month

If I did this correctly the CAP rate = 8% and it's pretty close to the 2% rule

I was considering all cash because the $350 per month cash flow – any kind of mortgage payment doesn’t seem to be worth it.

-At what point would it be worth it? Say if I could get it for $45000 out the door etc? It's an older condo and I know when large expenses occur the HOA comes knocking door to door so I would be prepared for those misc. thousand dollar expenses as any given time.

If the numbers make sense and I place an offer, I'll request more info regarding the HOA, like how much $ do they have in reserve, how old is the roof/AC units etc, are there any pending legal actions or other large expenses that could be looming in the very near future.

-***- Lastly, what things should I look for in regards to the property being a condo?What are the Pros and Cons of owning such a property.  Any advice on purchasing a condo for a rental is more than welcome.  

My goal for this particular property would be strictly for cash flow.  Any realized appreciation would simply be viewed as a bonus, and I would plan on holding for a minimum of 5-10yrs (hopefully longer).

Thanks for any and all advice, especially from anyone who has owned/rented out a condo before.

Drew