First Investment Property Possibility

[cisko77]

  Hey everyone.  First of all, I just want to say this board rocks!  I've gotten a ton of useful information just by reading old posts and threads.  So I must say thank you to everyone, especially the more experienced investors who take the time to help all us noobs out.  

 Now I'm trying to use what I've learned to make some $$$.  

Possible rental property in Indiana..  Close to Purdue University..  Nice, though small (not quite 900 sq ft, not including attached garage) 2/1 SFH on a good size lot.  It's a bit older, 1960, but looks new with all the renovations they did (new roof, floors, appliances, etc).  Asking price is 79,900.  I want to rent it out for a positive cash flow.  Comparable rents are about $600.  Seems straight forward, and if I lived in Indiana, it would be..  However, I live in FL.  Anyone out there with experience buying properties out of state?  I know I will need a property manager, I have a few that I am going to be calling to see what kind of fees I will have to pay.  Seems like 10% of the rent + one months rent if they find you tenants is how much it runs, approximately..  So right now, I am trying to figure out all the costs, so I can make the right offer, one that will give me positive cash flow after all costs..

  Basically, I want to make this a passive income property..  Anyone out there with any tips?  Financing tips?  I have good credit, so hopefully that won't be a problem..  Thanks in advance!

Cisco

[kimdrake]

If you pay even close to asking, you probably will have negative cash flow at 600/month. Calculate the Mortgage, Taxes and Insurance, as well as the property management fees, and start a maintenance fund for that new furnace or roof down the road.


Just to give you an idea, if this were a house in my area where houses rent for 600/month, I would have to be all in (purchase price, closing costs, repairs) for under 50k for there to even be a minimum amount of cash flow. And I don't pay a property manager.