Hi All-

I'm relatively new to the game, and I currently own one SFH as my primary residence. I'm preparing to move for work, and I will be purchasing two properties near my new location while renting out my current house (originally purchased with this rental in mind, and learned a good deal from the process). I'm looking for some second opinions on back of the napkin calculations to compare with my own for two options that I have found for the first new property, located close to my new workplace. I will ultimately buy a second property within the next year, but it will be in a larger metro area nearby so only one (or none) of the following properties are possible right now. I have had my eye on the market for the past five months and have seen deals like these picked up pretty quickly, and I am ready to pull the trigger myself on the next quality deal I find. I plan on visiting them later this week in person. Here is a breakdown of what I'm looking at right now:


Property 1: 3 bed, 2 bath, 1100 sqf. Foreclosure listed at 68,000 with ability to negotiate (however only on the market for two weeks so far). Defaulted loan was a VA loan originated in 2016, appears to be in decent shape but will require minor updates (paint, locks, etc.) and needs a refrigerator. Would require at least 20% down, and I would probably put 25% down based on my financing options, so 13,600-17,000 plus closing (for a number of reasons I need to use an investor loan for this specific property). Comparable properties appear to be in the 90,000-100,000 range, and rent for 850-950$ per month currently. The area is less desirable overall, but closer to the large employer in my area. Likely to attract the lower paid workers from this employer as primary rental crowd. No expectation of appreciation. Built in the late 90's.


Property 2: 3 bed, 2.5 bath, 1400 sqf. Foreclosure listed at 130,000. Likely no ability to negotiate, but VA vendee financing may be available (VA seller financing program), which means only 5% down is required ( $6,775) plus origination fee (can be rolled in to the loan), and there will be no PMI required. All appliances are new and the property overall is in good condition. Has a garage and a large fenced in yard. Located slightly further from the large employer in a desirable school district/more popular town, and will attract the middle management crowd from this employer as well as employees of the nearby university/ more of a middle class crowd. Comparable properties in the area are selling for 150,000-165,000 and renting for 1200. Practically move-in ready. Built in late 2000's, town is the only one in the area likely to see appreciation and has seen 8% increase in rental rates in the past three years.


Although I plan to occupy the property (likely with roommates) initially , I would like to examine both deals from a worst case-rental only perspective because there is no guarantee I will be staying put. Property 2 will likely qualify for a slightly better mortgage rate due to the type of financing, but for the sake of argument I'd like to compare them with identical financing.

For those seasoned veterans out there, what are the considerations that jump out at you? I don't want to prime the pump too much with what I'm thinking, because I'd like to see if I am heading down the right path. Thanks in advance for any ideas!