First Investment Property Guidance

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Hello everyone, this is my first post. I am serving in the Armed Forces and currently in the Georgia/Alabama part of the country. I am 23, married, and have no kids. Financially I have little debt to income ratio, and have about 3 months of my monthly budget set aside in savings. In addition I have about $12,500 in liquid that can be used for a real estate investment. As of now I have been preapproved for a 0 down VA loan.

I would like to purchase my first piece of real estate. This will be my primary residence as well as an investment property. I am interested in buying a duplex/triplex/quadplex. Due to work and time constraints I feel like I would be able to manage a tenant in a duplex, but not in a triplex or quad and would instead hire a property manager.

I understand the 50% rule as well as the 2% rule, and unfortunately cannot find ANY property that fits these standards. I am tied to about a 30mile radius outside of my base due to strange working hours and the commute associated with them. Therefore my search is rather limited. All of the golden deals have been scooped up by BP’aires already. However I feel like the time to invest in the market is now with interest rates on the rise. To compromise, instead of setting a goal of $100 positive cash flow per door, if I can have ANY positive cash flow I would be interested. I know some of you are shaking your head but my rational is if the property can pay for itself after 30 years I can still collect the reward, I do not necessarily need to be generating an income off each door every month. I have found 3 interesting properties I would love to share with you. Any insight would be appreciated.

The Wilma Duplex- In a nice part of town, 1990 construction, needs a face lift to maximize rent potential up to $750/ door. Brick construction, 1200 sqft perside, nicely landscaped with a large lawn. The purchase price is $150,000 with a 30yr fixed at 4.25% APR. There is a long term tenant inside now paying $650/month who has expressed to stay. She has not had a rent increase in 3 years.

My analysis: IF I can rehab the property and generate $750/door in rent my NOI is $1500. My debt service is $753.77, making the estimated monthly cash flow -$28.77 or -$14.40/door.

Extra info: I am under contract for this property but the VA has flagged it for a new roof. I am trying to have the seller put one on. If she does not then I will walk away from the deal.

The Yellow Duplex- In not as nice of a neighborhood, it is mixed between a couple eye sores and some other average, and above average properties. The property is 5 years new. Each unit is just over 1040 sq ft and has 2br/1.5 ba. It is a duplex next to a sister duplex, both are identical and have been foreclosed. 3 out of the 4 units are being rented for $650/month. It does need some landscaping, a lawn is nonexistent. I am certain I could purchase this property for no more that $110,000. I would use a VA loan, 30 yr fixed, at a rate of about 4.5%

My analysis: NOI is $1300. After the 50% to expenses I would have $650-557(ds) for a total cash flow of $93 or $46.5/door.

The Monster Quad- Next to the best part of town. Has a Home Owners Association. Listed for $269,000 I am assuming I could close on it for no more than $260,000. The neighborhood is only Quads, each one is unique in the sense they are different bright colors and the staircases and balconies are all in different places. It has a tropical Key West feel inside the premises. They are all two stories, and share a common pool, all are provided; pest, water, and lawn service through HOA. My building as of now is being rented for $620/door. The neighbor next door is paying $675. Each unit is just under 1000 sqft. They are 2br/2ba and built in 2004.

My Analysis: NOI generated monthly is $2,480. After 50% go to expenses there is $1,240 for DS. The estimated principal and interest payment at 4.5% would roughly be $1351.77 leaving a total monthly cash flow -$111.77 or -$27.94/door. However after 360 months of contributing around $40,000, I would still own a $260,000 investment that is still generating monthly income. That's what I put into my mutual fund each month, jeeze I hope I get that type of return on it after 30 years.

So in a nutshell that is a little about me, my goals, and my prospective real estate deals. Any knowledge shared, comments, questions would be a greatly appreciated!