Please share your opinion on this deal.

[Sophia Wang]

We are new to Real Estate investment, and just start to learn the market and the analysis process. Interested in one condo, and below is the numbers and info:
- asking price 67k; (just dropped from 72k in May, and has been 72k since last Sep)
- propose to offer between 57k to 60k based on recent sales in the same area;
- hoping to put down 20% and the rest 45k ish finance for 15 years;
- rent is average about $800-850 a month (3bed, 2.5 bath);
- the property is a condo, so HOA is $150 a month right now, and has been at this range for the past few years.
- the property is assessed at 89k, but recent sales are all around 60k in the neighborhood, this particular house was actually last sold at 50k back in the early 90's.
- the area is a University town, and the property is relatively close to the campus, so rental should not be too hard to get, but turn around might be high, like every year.

Using the free analysis spreadsheet, it looks like we are barely $100 positive a month on this one. But using the 50% rule, it doesn't seem to be working too well.

Questions:
- is investing in condo ever a good idea? considering you will always have to pay the HOA fee (currently $150/month).
- is it possible/easy to get a loan for 45k ish? and with today's rate like 4%? we do have the means to put down all cash, but don't really want to tie up all the money.
- is it a good idea to get finance for 15 years or we should go the 30 years route? (if we can get a loan at such a small amount)
- what is your overall feel about this investment?

Sorry for a lot of rumbling. Hope to get your input!! Thanks in advance.

[Nathan Emmert]

I stay away from HOAs as I don't have enough control with them.

If the house is worth $60k, you don't want to be paying $60k. As an investor, you're trying to buy distressed properties, properties that allow you to walk into equity. You should be thinking closer to $50k on a $60k property.

Sounds like an unmotivated seller if he clung to the previous sales price for that long, you may have a hard time working him down but trying seldom hurts.

You've noted how cheap money is, why would you be in a rush to pay back a low rate mortgage? Would you rather have that cash tied up as equity in your investment or sitting in your bank account looking for the next deal?

In terms an investment... I'm guessing you can find deals like this all day long, there's nothing special in this...