I’m getting ready to purchase my first rental property–well, actually two of them maybe. Half of me says jump on the deals, the other says one at a time. I guess I’d just like some advice or your past experiences so I can feel better that I’m not getting screwed–twice.
Here’s what I’m looking at:
Both are SFR in SW Denver, in ok (not great) neighborhoods. Both are finished complete rehabs that have been on the market for 3-4 months. Both are probably above average than surrounding properties because they are fixed up pretty nice.
2br/1ba/2car garage list: $156, appr: $175, offered: $147
3/1 $150, appr: $184, offered: $150
I structured each deal so the sellers would pay 3% closing costs and 3% to my down through one of those grant programs. I’m tyring to only pay $500-1000 down each.
I am pretty sure that I could rent or long term L/O each of them for around $1100-1200/mo, based on looking at what other places are going for.
At that rent I can cover my mortgages, taxes, ins. plus $100-200/mo.
I have an LLC set up with my partner.
I’m going to get the appraisals verified or re-cert (whatever) by another appraiser in case they’re being a little to nice to these guys.
I plan to get inspections, of course. And probably home warranties (is this a good way to prevent huge repair bills?).
From what I understand, appreciation around here is 6-8%.
*So, can you answer these questions for me?..
-Is it bad (for appreciation) that they are nicer than surrounding homes?
-Is it being rediculous to make your offer to purchase subject to finding a renter prior to close?
-Is my cash flow too small to mess with?–I’m really after the equity (refi or get a second in 6 mo) to get some cash to keep on investing.
-I know I can do gift funds as an O/O, but can I even do that for an Investment Prop?
-I’m about an hour out of Denver (when there’s not a foot of snow on the roads), and have a flexible, but pretty much full time job–should I get a PM or not waste what little flow I’ve got?
-Is there an advantage of doing 2 at once, or should I slow down and get some experience from 1?
-Is there anything else that I’m missing?
Thanks in advance for all your help, advice, and experiences. I’ve been reading a lot in the message boards, you all seem to really know your stuff!