Cash Flow In Dallas

[Brandon G.]

I'm playing around with J Scott's rental analysis spreadsheet. I've read that $100 a door is considered a good deal but not sure what all needs to be included in the equation. 

As a case study, I'm using a house in Rockwall, TX whose ARV is $150,000 and rents for $1395 per month. At 70% ARV, that's a $105,000 investment. Some other variables I"m using are $3290 for property taxes, $660 insurance (total guess), $1,674 for maintenance and capex, 12% PM etc. After all this I only come to $403 annual cash flow.

So my question I guess is what's wrong with this deal? Are rents too low in this area? That seems to be the going rate for houses in the price range. Please advise. 

[Nick B.]

@Brandon G.

Here is a "back of a napkin analysis":

Gross rent: $1395*12 = $16740

Less vacancy (8%): effective projected gross rent: $15400

Less taxes, insurance, PM (10%), etc. : $15400 - $7164 = $8246

Say you financed 100K @4.5%. That's $506/mo or $6072 annually

Cash flow: $8246 - $6072 = $2174 or $181/mo