So there are two properties on my watch list. Either would be my first rental property purchase. Here's my favorite:
3 bdr, 2 bath, 1150 sq ft, basement, garage.
Price: 74,900 Closing costs: 5000 Repairs: 4800 (new windows, cabinets, paint) Total out-of-pocket: 24,780
Down payment: 14980
Rent: 1200
50% rule = 600 cash flow
600-300 (mortgage)
$300 true cash flow
300x12 = 3600 or ROI of 14.5%
Based on my research this seems like a decent deal. It meets the 1.5% rule. The only problem I'm facing is the bank (it's a foreclosure) is only accepting cash offers due to a miniscule amount of mold in the basement. My mother is a realtor and has checked the house out herself.
I suppose I could use a hard money loan (then refinance into mortgage) but I think this is more risk than I want to take. Any thoughts on the numbers themselves or my purchase dilemma?