First Investment Property...my mind changed after reading BP

[Andrew Namkoong]

Hi everyone,

I am in the process of buying my first investment property...signed the contract but have two days to send the earnest money and 8 days for an inspection period. I made that decision right before reading BP podcasts and blogs. Now I am really hesitant to close this deal...

Deal summary

Location: Norcross, GA

Purchase Price: $218k

Using conventional loan - 4.375%, 20% downpayment

market rent $1600-1650

brand new (less than 4 years old) townhome, end unit, in a very favorable location

This community/area has gone up $60k in the last 3 years and I thought there was some room for more growth given the market condition + desirable location. 15 year old houses are trading around the same price in the area, which gave me a little more confidence that this property could gain value in the next few years. My strategy is to exit in 3 years.

Based on my calculations, it will generate 3.7% cash-on-cash return in the first year (with an aggressive expense estimates) - I am betting on the appreciation value than cash flow. But now that I have listened to bunch of BRRRR strategy podcasts and blogs, BRRRR seems a lot less riskier than buying a property and hoping for a "potential" appreciation.

Regardless of buying this property or not, my next deal will be BRRR and already made an investment partner who has a good connection with rehab workers.

Any advice would be very helpful.

Thanks guys!