Should I buy these two houses?

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@Jack B. congratulations on your success to this point. You seem to be doing well and you're looking to add to your portfolio. My hat's off to you.Whether or not you should invest in these two candidate properties however leaves me with more questions than answers. Are you planning to purchase both properties, if all goes well or you trying to decide between these choices? Have you figured your expenses other than cost of money, such as taxes, insurance, vacancy and reserves for the unexpected? What is the market vacancy rate, particularly in the less savory neighborhood?What are your repair cost estimates?How long do you intend to hold these properties?Are you counting on passive appreciation to make the deal?What are you doing for to protect your assets? Do you have property management?First of all, the only appreciation I would depend on is forced appreciation. I love passive appreciation, but since that is not under my control, I don't factor that into my investment calculations. That being said, if you had to pick between these choices, I might use the possibly of appreciation as a tie-breaker.Along the same line of reasoning I wouldn't focus as much about the market value of a property that I planned to hold for a long time, but I'd keep it mind. I would want at least some equity at the time of acquisition. If I would be uncomfortable walking through the neighborhood at night, that would weigh heavily against my decision to purchase a rental property. @Brandon Turner invests in the Seattle area and he doesn't invest in rental property that would make him uncomfortable having his wife walk through the hood at night.Have you set up entities, have liability insurance or enough debt to protect your assets. It seems like you may attract an unscrupulous tenant somewhere along the way that may sue you just for the money. If they can get to any of your assets with a suit against one of them, you're gonna have a problem. If you have enough insurance, you'll be OK, but how much is enough to protect you against the worst possible lawsuit. Leveraging your properties could provide you with the most cash while lowering your asset exposure. Combined with entities and insurance could provide you best safety along with greatest cash. Have you considered this?The bottom line is how you feel about these deals. Do you like them, one or both? Have you considered everything? I suspect you've looked at most of this and you're probably pretty sure what you want to do. It's very wise to run the idea by the community, but this will be your decision. I'd be fascinated to hear what you decide to do.All the best.

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Also think about the post-war effect on JBLM - shrinking size of military presence. Depending on how long you want to keep the property, you may want to consider the direction of JBLM in the future.You can always count on the school being there, especially if its so new. Just be sure to start/end contracts nearer to the beginning of the school year.

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Are your properties in Lakewood? Good area for cash flow.. and fix and flips!

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I am a single family investor who loves appreciation. On the other hand I am all about "location". You need an area that will rent out well! So I would go with 2 over 1 because the location is better and it is 3 bed versus 2. I don't really like 2 bed unless you are in a "swanky" area that is going to really appeal to young couples. In great areas and school districts you are predominantly appealing to family's. Family's "as a rule" are going to want a 3 bedroom!

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The three most important things to consider when purchasing a house are location, location and location. You've got your answer. And as an FYI, I NEVER purchase single-family houses. When the tenant vacates, you're sitting on an empty property that isn't generating any rent, while you look for another tenant. Stick with 2-4 family properties. When one tenant vacates, you still have three other rent checks coming in.

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First off, congratulations on the deals! The numbers look really good in the Seattle area.Based on your description I like the second one better, it's newer and in a better location. The fact it has 3 br means it's more likely to attract tenants with a family, and a family tenant is typically more stable especially if the school is good.

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What is the quality of the new school? Close to a desirable school is good. Close to the base is great. Have you put them through the BP calculator or a similar tool?

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Tom, I am trying to purchase either both or one or the other, depending on which ones the community thinks are keepers.Yes, I have factored in vacancies and repairs. The repair on the house in the better neighborhood is about 3K, most of that for new appliances.I am not counting on appreciation, these houses will fund my retirement via cashflow while my investment/stock portfolio builds up.I manage the properties myself and have an umbrella policy for protection. LLC's don't provide the protection they once did...I told my agent to tie them both up for now, at least for inspection. I am definately leaning toward the house in the better location, but will pursue both for now.

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Sorry I did not mention the cash flow. Rents are at 950-1,100 per unit while the mortgages would be about $550 each.

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If you're investing for cashflow you need to consider that. What will each of the places rent at? Then calculate the cash down into your cash on cash return (or cashflow, whichever is more important to you).I wouldn't even think of buying either property without some idea of what the numbers look like. Other than that, if you personally don't feel comfortable being there, even at night, I wouldn't buy the property.