All Forum Posts by: Matthew McKinley

Thank you for your response. This area hasn't flooded since the FEMA records have been kept. Some 70 years. I've seen it during pretty bad flooding and the area is very dry so I am quite certain the houses are not at risk. My question was how to evaluate the second half of your response. The effect of being unleveraged and lack of significant appreciation.

3 months ago I purchased my first rental house for $50,000. It was move in ready, I put up a sign, showed it 16 times in 2 weeks and had a renter in 4 weeks for $875/month and $2,000 down. I have the opportunity to buy the house next door, similar size/rent, for $40,000 and it will need a little work but not too much. The tricky thing about these houses is they are in a FEMA flood area so: 1) They aren't going to appreciate as fast as other properties since flood insurance makes them tough to sell and 2) I am paying cash and not keeping a mortgage to avoid paying the flood insurance. I'm just wanting some insight as to how to look at the numbers to evaluate the deal.

Recap:

$100,000 cash investment

$1,750 monthly gross income

Thanks for any insight