First purchase advice

[Tony Gazetti]

Hello all!

I'm on the cusp of making a move on my first rental property - I've been learning and researching for months, I now have enough knowledge and money to jump in and start doing, and I'm extremely excited!

I would, however, like to share my deal analysis to make sure I'm on the right track and not under/over estimating anything. If some seasoned investors with at least a few buy and hold deals under their belt wouldn't mind taking a look and giving their feedback, I'd really appreciate it! Thanks!

Details:

I plan on paying cash for the property and then financing with a 30-year mortgage.

These numbers are assuming that it appraises for $51k so that I have 20% equity in it when I finance, and the loan is for the full purchase price (no money out of pocket sans closing costs).

LP: $45,900

Assumed purchase price: $41,000

Assumed appraisal: $51,250

Tenant occupied, current rent: $875

Does this look like a good deal? Anything I might be missing?

[David Chan]

$41k for a house? Class C / Section 8?

The capex estimates are good, but your maintenance and repair budget isn't realistic. 75-100 a month maybe, 25 isnt going to get you anywhere. (our portfolio has a budget of 150/mo per house, and we are all class B+ and A's with very little deferred maintenance and an aggressive capex spend.)

30 year mortgage on an investment property is also not going to be that easy if you are working with older housing stock. If you are able to find a commercial lender to do 30 year my experience is that they are wanting 5+% rates at the moment or 30-40% down. Mortgage numbers seems too sunny with flowers, but maybe you have better bankers than I do.

Throw these variables in..... the deal is barely break even cashflow and a low dollar value deal. Not something that I would ever do, and doesn't seem that exciting. Unless you know something that I don't know (area gentrification, redevelopment, buyout potential) then I see no reason to get into it.