Would you buy these SFH? newbie asking for help

[Bruce Warren]

Hi,

I am a total newbie and found this community by stroke of luck.  I need some advice and explanation. Can you take me through your thought process analyzing these and tell me if they would be good for long term buy and hold? I'm looking to build retirement income.  Would you buy one over the other? why? would you buy both or neither?  Please don't send me to the calculators cause even after running them through them, I'm really not sure of what to look for as far as cap rates/Cash on cash/50% rule etc.  What would you consider a good investment?

Property #1

Purchase price $71K

Closing costs $900

Expected rent $900/month

Insurance $1200/year

Property management 8% +$500 tenant placement/year max

Taxes $800/year

Mortgage- 30 years, estimating high interest rate of 4.8%

Mortgage closing- $1500

(likely to need a roof and AC in about 5 years- $13K)

Property #2

Purchase price 89,250K

Closing costs $900

Expected rent $925/month

Insurance $1200/year

Property management 8% +$500 tenant placement/year max

Taxes $900/year

Mortgage- 30 years, estimating high interest rate of 4.8%

Mortgage closing- $1500

(fully renovated- new roof/new AC/new kitchen etc.)

Estimating rent increase of 3%/year, Exp increase at 2% year and appreciation at least for 3%/year (both homes were priced in the 120-140K range 8 years ago)