Roofstock Property Purchase: Finding My First Property on Roofstock

Now that I am familiar with the site, I can get started searching for appropriate properties.  There were several properties that were great deals when I was first exploring Roofstock, but I was unable to move fast enough to make a move on them.  I recommend getting pre-qualified for a loan as quickly as possible if you are serious about getting a property so that you can move quickly on good deals.  

Pittsburgh, PA, a hot real estate market

In general, I've found that very few of the properties reach my standards for a solid investment.  What is my criteria?

• Under $150k

• Cash on cash return of 10%+

• 2-3-star neighborhoods (would have to be really good to get into a 2)

• Buy and Hold

• Refinance/capture my initial investment within 5 years so that I can repeat the process

Roofstock likes to list the 5 year yield and IRR, which can make the properties seem like  better opportunities than they really are. This criteria revolves mainly around appreciation, which I don't like to count on since it is so dependent on the current state of the economy. I want my investment to make sense without appreciation, and then enjoy the additional benefits of it when it occurs.   With that in mind, I have found a property that looks like a good opportunity in a growing area, Pittsburgh, PA:

It is a duplex in an average neighborhood listed at $120k, with total market rent at $1600.  

Notes on this property:

• Not obvious that it is a duplex as there is only 1 address listed

• Unclear whether Roofstock's valuation of the property is for one or both of the units

• Unclear whether or not both units are vacant

UPDATE: I was able to quickly clarify these items through my Roofstock advisor via email/phone. Here are my initial numbers after some research:

This is a little below my desired cash on cash (CoC) rate, but is in a good area so I am willing to take a slightly lower CoC for that.  I did more research on the area and the investment, and it's looking like a good property.  Based on valuations from Zillow, Trulia, and Roofstock itself, I figure that the appraisal and actual valuation will come in $10k+ lower than the list price, and with inspection and appraisal contingencies on this property I feel okay about going into it at a higher initial offer price since the numbers are still working out at the offer price.  I figure worse case, I'll just get an even better investment! We'll see if this is a good strategy or if the seller will be very fixed to the offer price.

There are a few factors that have helped me jump on this property before anyone else:

• The list price is higher than most valuations

• It is an Inspection Contingency property, meaning not Roofstock certified and rent is not guaranteed

• There is unclear documentation on Roofstock.com as to the single or duplex valuation and/or vacancy

• Duplexes generally require 25% down payment compared to the normal 20% down on SFH investments (I didn't realize this until I got into closing)