Charleston SC - Buy/Hold or BRRRR

[Pearce G.]

First deal.  One unit within a 1-story brick 4-plex.  3 bed/1 bath.  Owner-occupied for 10 years.  She is moving out of town to be near kids.  Neighborhood is about half owners, half renters.  Low income, but exteriors are well-kept and personalized.  List price was 70K.  Agent recommended 55K offer and seller took it.  I tried to negotiate down after inspection, but she wouldn't budge.  Turnaround is mostly cosmetic anyway.  Will need a new stove, fixtures, paint, minor floor repair.  3K and 30 days if no surprises.  Should rent for $900, maybe a little more.  Expected cash flow $200+.

Because I don't have 2-year income history, I'm financing this myself against a brokerage account. The good news is the rate is competitive, there are no points or mortgage insurance, and I can act quickly. The bad news is it ties up cash, lowers my ROI, and is not a sustainable financing strategy. With a couple of deals under my belt, however, I hope I can transition to OPM.

Bought it with the intent to hold for cash flow, but an ARV over 80K would be tempting to either flip or re-fi. Closing scheduled for 6/20/16.

Stay tuned.