I’m not sure why you would need a second opinion when u know in fact that it’s a good deal.
With a cap rate of 13.9%? Wow! (doesn’t include debt service)
now…
let’s add the debt service of another yearly exp of 13,212 and we get around an 8.5% cap rate. not bad, not bad at all.
Sorry for resuscitating this old thread - but I wanted to give the group and new investors a taste of reality about RE investment.
I ended up buying the property , owned it for 3 years , sold it in November, whew what a journey its been!
The property made me some money the first year , but the next 2 I bled , pretty badly.
Compounded by the fact that due to the location I had to hire a manager who fleeced me high and dry.
I would get routine "plumbing bills " for 4000, “sewage” fixes for 2000 high turnover on tenants though the names would be the same.
The place was also far away so i tried to be on top of things as much as i could but it was tough.
Also come to find out that the construction contractor company was also owned by the same property manager.
Im pretty sure he made away with over 15k of my money.
I sold it for 20k less than I bought it for but at least the bleeding has stopped.
I have 2 more properties that im managing on my own with a fine toothed comb - i fix stuff myself, i get the sweat equity out of it myself without any help, and they’ve been working nicely for me so far touch wood.
I bank about 950$ every month on them for the past 4 years.
Be careful, dont let your ambition break your bank, no one cares for your money as much as you, so YOU do everything, thats the only way. Trust few or better still noone.
I had the same thing happen to me on more than a couple of out-of-area investments.
The PM fleeced me with bills for repairs that were never performed.
I paid for a new garage door and bathroom, twice. The first time, when the bill came. The second time, after the PM was long gone, and I discovered that nothing had actually been done. There was more to that horror story.
I had a PM break into one of my rentals, do damage, and then give me an estimate for repairs. The same PM soon gave me an estimate to replace some fascia and rain gutters on another property. I gave him both jobs and paid ‘twice’ for those, too.
But his estimates were soooo reasonable…!
I want photographs of what needs fixing, and proof of repairs, before I pay bills on anything I can’t drive to. However, you really don’t want a PM, with a conflict of interest, performing the work.