First Investmnt Property - Should I bid??

[Justin Hash]

Hi Team!

Buying my first investment property in the CLT / Gastonia area. Posted below are the metrics surrounding the property I am interested in. 

Can you all let me know your thoughts? (Think this could be a potentially good investment, and im worried that im missing or nor seeing something). 

Thanks!

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Property Overview

1. - Location: Gastonia, NC 
2. - Prop Type: SFR (3 Bed, 2 Bath, 1 Floor)
3. -  Purchase Price: 130K
4. - Sq ft: 1,173

Financing / Upfront Costs 

• - Loan Type: Conventional Mortgage @ ~3.1% 
• - Down Payment: 26K (i.e. 20%)
• - Closing Costs: 6K
• Total Upfront Cost Costs: 32K 

• - Budget for Potential Rehab: 15K
• Total Potential Costs: 47K

Monthly Revenue

• - Anticipated Monthly Rent:  ~1,100 (based on rentometer)

• Total Revenue: $1,100

Monthly Expenses

• - Taxes: $100
• - Insurance: $100
• - Mortgage: $347
• - PM Fee: $120

• Total Monthly NOI post Expenses: $443
• Total Monthly NCF Post Expenses: $243 (assumes $200 in capex per month) 

Returns

• - Yr 1 Cap Rate: 2.8% 
• - Yr1 ROI: 7.9%

Final Thoughts

- Not sure if this is a good investment given the returns. But, feel like i could potentially negotiate the purchase price down to a healthy level to make it make sense. 

- Additionally, outside of the financials i am worried that the home is not close to a good school district (in fact, most schools around it are rated 2 or 4 out of 10 in terms of quality.

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Really appreciate everyone's thoughts, and cant wait to purchase my first home!

[Justin Hash]

Hi Brandon,

Thanks for this! Rehab is a current estimation. Do you have a recommendation of a calculator I should use? Also, any tips on know what exactly needs to be fixed? (For example, if flooring was maybe carpet should i always assume it automatically needs to be changed?)

Thanks!

Best,

Justin Hash