First investment property: need a sanity check

[Matthew Mucker]

I'm heading toward closing later this month on this property and though I think I've got a decent deal here, a second opinion would be appreciated.

I've found a SFH in a decent neighborhood, 3 br 2 bath, garage has been enclosed, 2 carports in the driveway. Built 1974, ~2000 sqft, nice yard. I don't think I'd have any problem attracting quality tenants.

The contract is for $92,500. I don't know how much I could get for rent; $950 on the low end, perhaps as much as $1200 on the high end. I expect $7500 to $10K in repairs.

The appraisal hasn't been done yet, but I expect the house to comp at $125K to $140K. (I'm cautiously optimistic that it would approach the higher end.)

The wide range is because I don't know how to account for the enclosed garage. Because the garage is now living space, the sqaure footage of living area in this house is larger than most of the comps. I used worst-case numbers in my analysis and with those numbers it doesn't look great, but it looks reasonably 'safe'.

Using the upper end of the range for rents and comps makes this look like a rather good deal, I think.

I'd like to get into the property, get a tenant, and then refi my initial investment back out so that I can repeat the process. I plan to sell in a year or two to tap the equity to repeat the process yet again.

If that doesn't look possible I may investigate immediately selling this in a wrap mortgage.

Without the refi or wrap, I won't have enough capital to buy my next property for a long time.

I'm at the point in my investing career where I want to multiply my equity rather than grab long-term cash flow.

Thoughts?