Posted by Mr Donald (NORVA) on October 17, 1998 at 19:59:48:
Re: Your Socratic question…
“Is it a good idea to spend $7,500 down plus $6,000 closing costs, plus $5,000 for initial repairs, and then rent to section-8 low income tenant, in order to get a few hundred dollars a month?”
I certainly hope you’re not out trolling here in CREOnline.
Certainly your deal is by no means a great deal as your cash-on-cash return isn’t much to speak of here.
$18,500 out of pocket - and you even think that this deal should be considered? Please…you’ve got to be kidding - or in need of some serious financial therapy.
What is your ultimate goal? Hold, appreciate and sell? Is there any value to this property going in? What’s the FMV? How much is your Net Monthly Cash-Flow? If you sold the property tomorrow would you recoup your out-of-pocket expenses?
Once you answer these questions faithfully, you’ll know the truth when you see it.