[Calc Review] $20k property, does it make sense?

[Aditya Maini]

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*This link comes directly from our calculators, based on information input by the member who posted.

This is a condo unit in a rural part of the state. Unit requires minimal rehab work (cleaning, new paint). Going to be paying full in cash. Currently does not have HOA but most likely will in the future - not sure what that monthly cost would be.

Currently tenant occupied, going to look at vacancy rates from property manager soon. 

What do you think? Thanks!

[Jim Goebel]

@Aditya Maini

Hi!  Well, as we get closer to the $300/mo cash flow and below - I have a really hard time trusting that my assumptions aren't going to 'eat me up'.  It looks like you are calculating based on cash on cash, but I'd think you'd want to include some financing/debt service etc stuff in there too.

There's nothing wrong with buying something for cheap.  As a matter of fact, that's what we should do.

Those rents are a bit low, though. I'd really think that this decision hinges on your assumptions and how you feel about the tenant class you can attract (and therefore your ongoing time investment and CapEx to maintain the property).

Anyways, don't you have other options that might generate a bit more equity and/or cash flow?