I just want to know what you guys think of this deal. I have found an older gentleman who is selling off his rental properties because of health reasons. He is offering a 1 bedroom, 1 bath on contract for $150/m over 60 months/5years. I could rent this out for 300-350/ month will a little bit of work. This is a very small house, and I don’t think it would sell that easily if I ever needed to sell. It needs about 500 in repairs done to it. This would be my first deal, and I just want to get everybody’s opinions? The cash flow works out, but something about the size and location of this house bothers me.
If this is a house on its own piece of property and the total payments are $9,000 and you think that you can get it rented, and there are not bullets flying all around, I LIKE IT. The positive cash flow in the first 5 years would only be about $25, but you’d have it paid for in that period.
If it has positive cash flow, its probably worth doing.
about the location and size of the house. dont worry about it.
infact, those little starter homes are one of the hottest things going right now.
When I first got into flipping I bought a fire damaged house in a high end neighborhood. (very nice house and location) rehabed it, could NOT sell the thing. dispite all new construction and a very fair price.
When people go to buy a nice home in a nice location chances are its their second or third home and they will go through a ton of them before they buy. They’re putting up alot of money and have been around the realestate block a few times so most buyers will be very emotional.
moral of the story: I now buy starter homes, homes that people NEED because they have a family and they NEED a house that will function as a place to live rather than a place to show off at a dinner party. Atleast in my neck of the woods, these little pill-box houses sell like hotcakes. It may look a bit small and rough around the edges, but theres a young family out there that cant wait to move in, im sure.
I do agree with you austinmkCT. Smaller first time home owners are better investments and can make you just as much profit as some of the upper end house by the time you crunch the numbers or atleast the % is close. I try with my investments to help the people when buying or selling but not limit my profit. Isee that by helping those trying to start out in the world w/ thier first house can be a great feeling. My advise is to always buy right and never undersale yourself but help people in the process.