Updated over 7 years ago on . Most recent reply
First rental property purchase
Good Morning BP!
I think I may have found my first rental property but want to make sure I'm not missing anything. Property is located in Memphis in the 38118 zip code which is where I really want to be. It is currently rented for 700 but the rent should be about 850. It's a long term tenant that wants to stay so I think I will shoot for 775. Asking price is 60k and I have asked if the buyer would do seller financing and he said max of 5 years but is open to it and my target is 2%. My thought process is a ballon payment at the end which I would refi. Apparently the tenants REALLY want to stay and they seem to be fairly nice but they are running everyone off that wants to be an owner occupant. I plan on managing it myself but could put in the PM fee as well. It's not the most amazing deal in the world but seems like a good start for me. I could put more cash down but with this deal it just seems best to only put 5k down.
Purchase Price: $57,142
Down Payment: 5k
$25,000 financed for 5 years at 2%
$27,142 ballon payment in 5 years
Taxes: $1,185 per year
Insurance: $495 per year
Maintenance and Repairs: $1,050 per year
Admin - $150 per year
ARV: $77,460
Repairs needed: $3,100 but if the current tenants stay they have already stated they like it how it is.
Any help and advice is greatly appreciated!