First Investment Property in Northern Virginia

[Phil K.]

Hi All,

I'm looking to buy my first investment property and came across an off market yesterday. It's a distressed property in Northern Virginia (older condo) and I'd like advice on whether or not it's a solid candidate for a BRRRR or Fix and Flip. Here are the numbers:

Market Value: 210K

Purchase Price: 140K

Rehab Estimate: 25K

Cash Invested (Down Payment + Closing Costs): 38K (65K if I cover the rehab)

Gross Rent: $1650

NOI: $300-600

Estimated Cash Return: 19.17%

Here are my questions:

1. 1. Do these numbers make sense from either a BRRRR or Fix and Flip perspective? (I need an ARV estimate).
2. 2. It’s an older condo, which makes me nervous as a new investor, (home inspection is a given). Beyond looking at the condo association’s fees, cash reserves and assessment history, what else do I need to dig into before pulling the trigger? Based on the local market, I know these deals are few and far between so if I don’t jump, other investors will.
3. 3. Seller’s motivation. I need to dig into this. Does getting a deal for 70K below market value with 25K rehab seem too good to be true? (Note: I got the lead through a friend who I trust).
4. 4. I'm planning on buying my first house hack in about 6 mo. How would this purchase affect my ability to get an FHA loan? (I was advised I could always get a REFI on the rental if I need to free up money for the house hack).
5. 5. Is this a good enough deal to buy now even with the uncertainty of future market conditions (deferments, CARES Act, etc?) To quote Ken McElroy, I don't want to catch a falling knife.

I'm inclined to see if I can get a loan to cover the rehab so less of my cash is tied up. I plan on doing my own property management/tenant screening to eliminate that cost. I was also advised we might be able to get the rehab done for 20K (contractors are already vetted through someone I trust and do enough volume with to get a discount). Overall, it appears to be a good cash flowing property for a BRRRR, while also having potential for a Fix and Flip. Appreciate any thoughts or insights more seasoned investors might have.