I've been looking for some additional real estate in markets that are favorable for investors. I'll be a long distance investor, which I am fine with.
After lots of potential deals, I've found one that looks pretty good and is not on the MLS.
Asking price: $137k
Deferred maintenance: $0-1000
Fair market value: $175k (I hired a realtor to pull comps for $50)
Rent: $1425/month
Rent range: $1400-1550/month
Annual taxes: $3100
Insurance: $600
Property management: ~13%
Financing: 30yr fixed @ 5%, 20% down payment, assuming $4k in closing fees
All-in cost: $31.4k
Assuming 8% maintenance and 8% vacancy, here are the returns:
cash on cash: 4.5%
including mortgage paydown: 9.5%
including 3% appreciation: 22%
The returns aren't astonishing but I like the ~$30k equity cushion in case I want to sell in the future.
The house is in a very desirable area of Texas with excellent schools and low crime. The job base is also very strong.
What if I didn't buy it? Well I would probably put the money in the total stock market index fund. Or look at cash flowing properties in areas with weaker job markets.
Thanks for any advice!