First Investment Property

[Corey Schlueter]

Im looking at a property right now priced at $20,000. I estimate renovation at about another 20k, so I'm in it for 40k. Cash flow would be great as rent in this area are 800/month for this type of house, but I cant seem to find good comps. There all over the place from 83$ a square foot to $52 on houses that sold fully remodeled recently. The house im looking at in 936 square foot witch puts my price per square foot at $42 per square foot. Not counting my 30% discount. 

I guess my question is should I buy it even though the resell value doesn't quite reach my 30% margin just because the cash flow will be good? What would you guys do? There is also 8 other offers so I might have to pay a little more to get it. 

[Jeiby V.]

Hi @Corey Schlueter!

        There are a lot of variables that's left out to make an informed decision from what you state. Since i noticed you're in CA I wonder if you have all the correct systems in place I've personally never been to CA so my first thing that comes to mind from reading is the property located near meaning you'll be doing the management? and if not do you already have a management company in place?

Also from reading I can tell your not certain in regards to the ARV of the property this just comes to research how well do you know the area, how fast are properties selling renter market or buyers market? I guess what I'm trying to say is just be careful it seems like your in a bidding war and the last thing you want to do is over pay and not have enough exit strategies in place to recoup. If your serious about the property stick to your numbers and if you can't meet them just walk away and find another. Please make sure to buy right so you could profit on the sale even if it takes about a year or make sure the rents you state are accurate you could just hold it.

Hopes this helped in anyway!