100% Owner Financed Deal Whats Your Opinion

[Tyler Von Harz]

So I've got a deal on my hands and I would love to get some opinions from some more experienced investors.

3 Br 1B in private community. I've estimated the ARV at $60-$70k from properties in the neighborhood. (Every property nearby is extremely similar).

Built in 1969. Needs nothing besides maybe some repainting and cleaning up. Very recently went through a full rehab.

Rents for $950-$1050. Decent area. Lots of woods. Quiet streets. 

Owner willing to finance with nothing down. $55,000 at 4.2% interest over 12 years. Monthly payment of about $487.

Taxes and HOA fees run $1,800. Insurance $1,200. Putting aside 10% for maintenance/repairs, and assuming 5% vacancy.

I would be self managing because it is close to me, a very safe neighborhood, gated community with a lot of amenities, and security patrolling, etc. so I would be comfortable with it.

I figured it looks like a good deal but cash flow is a little tight. What are your thoughts?

[Corey Woodruff]

Your monthly payment is 487 a month and all of expenses including insurance mantaince, hoa fees, vacancy, repairs will total about 450 dollars a month leaving you with 63 a month in cash flow. Cash flow is very low but, you have nothing invested making that a 75 ROI! Now im going to tell you why i would jump on this deal all day. because after 12 years the mortgage will be paid off and you will be cash flowing 525 roughly every single month a property you have 0 dollars invested in!!!!! not a bad deal and at the end of the day tenants paid your mortgage and in 12 years you have a house worth more than 90,000 with appreciation owned free and clear.!!!! awesome deal !!!