Could use another set of eyes of the house I offered on

[Teho Kim]

As a beginner investor I could really use some extra opinions and see if I should be taking the plunge on this SFH.

I don't know if it was a mistake, but I submitted an offer and counter offer on the property.

$138,000 / 25% down payment

year built: 1967 

3 bed, 1.5 bath, 1 car garage

1316 sq ft

B location in Indianapolis ; projected vacancy: 5.4%

No/minimal rehab

projected rent: $1250

taxes: ~$2000/yr

My calculations yielded around $70/month for cash flow. I know that's not much, but should I wait for a better deal? Looking around and listening to podcasts, it seems like the first deal is just all about getting the experience.

Really appreciate any insights.

[Dennis M.]

@Sam Hopkins

That sounds fine and good until the tenant leaves or dies and now that 70$ positive turns into 1000$ Negative real quick . Or a 2500$ furnace / hvac goes out then you get nothing for the next three years ...Or a 10,000$ sewer line needs torn out then he can wait 12 years to break even ... if his taxes go up ( which they surely will) 800 bucks , He breaks even . Now some might say “ yeah but the tenant still pays the property and it appreciates over time “ well you could have that anyway AND get cashflow

[Phillip Lanier]

You need more meat in the deal. $70 is not much and what if you wanted to eventually pass on the management to a property manager? Also, what if taxes or insurance goes up? Is that including CapEx?

Are there any needed repairs?  Do you know the age of some of the mechanics such as the roof, HVAC, water heater, etc?  In other words, can you predict when they may fail and are prepared for when it does? 

I'm in Uvalde, so similar market.  You can find deals, you just have to look. 

Best of luck!!! 

Phillip Lanier

[Pearly Tan]

@Teho Kim

If you are looking at rent ready properties, it might also make sense to look for reputable turn key providers.