My First Deal

[Garvin Watson]

Good Evening Everyone, It's finally here. Since I've started here at BP I have read forums after forums about success and failure with investing.And the encouragement each of you guys and girls provide help to pave the way for us beginners to continue at what we love.Thanks and I really appreciate all the professional advise. With that being said , I'm finally closing on my first deal. The property is located in Lake Worth Florida . Over the years it's has had its ups and down. But the rental for this particular neighborhood is consistent . I've yet to receive my official appraisal. But from what I'm estimating using comps and visual of the neighborhood the property is overprice about $15,000. It's a duplex which is currently rented out at $900 for a 2/1 and $700 for 1/1 . The property had a good review from the inspector with minor cosmetic needed. My question is does this meet the criteria as a good investment property?at this point monthly after my mortgage have been paid I should see $400 in return.Also I was thinking if I took the inspector advise and change a few cosmetics onsite I should be able to raise the rent slightly. Please advise

[David Sicherman]

Well re-reading the post:

 "the property is overprice about $15,000.", than it's not really that great of a deal is it?

Your cap rate is probably around 7% or less after all costs, so you could do worse.  Just depends if you are happy with that kind of return on your money.

Some would say as long as the mortgage is paid and cash is flowing it's a workable deal.

Now if you add property management costs and there's some kind of major reno that is needed, that can kill your profits overnight which is common for those old lake worth duplexes.  Hard to tell without address.