i have questions about my first buy and hold deal
2 Replies
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Mario T. Banker from Glen Allen, Virginia
posted over 3 years agohello bp community,
im interested in my first buy and hold property that a wholesaler brought me. but i'm hesitating because im not sure if it's a good deal and what question i should ask.
it's townhouse 3b/1.5b 1006sqft was recently renovated within the last 3 months. there is a tenant in place that is current on rent $800. they are asking for $55k.
im interested in conventional loan which requires at least 20% down on rental property (=$11k) and i calculated vacancy rate of 10% (=$960 based off of $9,600 gross rent), as far as i know there is no repair needed, but i'll factor in 15% (=$1440), what type of monthly expenses should i factor in? and when should i request the lease agreement to read it over myself? any other question i'm missing?
thanks for the help
David Tomich Investor from Flagstaff, Arizona
replied over 3 years agoIt can be helpful to quickly evaluate a deal by assuming a 20-50% operating expense, but I'd recommend getting more detailed. In addition to the expenses you mentioned, (mortgage, vacancy, repairs) consider:
Property taxes
Rental income tax (if applicable in your area)
Utility bills (unless tenant pays)
Property management (unless you'll do it yourself)
HOA fees
Advertising (when vacant)
Best of luck to you!
Mario T. Banker from Glen Allen, Virginia
replied over 3 years agothank you @David Tomich i will keep those in mind on my next one, cause im hearing from other BP member its a lost cause
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