My First Trial Run on a property. Testing the Numbers.
Property is $179,000 for a 5 Bedroom Multi-Family home.
They said the total income is $2075 for rents ( Based on a site)
$2075 * 50% Rule = $1037.5
20% of 179,000 is 143,200 @ 4% interest Rate makes the Mortgage $683.33
( No PMI or Property Tax because thats part of the 50% correct?)
Cashflow = $1037.5 - Mortgage
$1037.5 - 683.33 = $354.17 Cashflow
( Brandon in his 50% Video he said he likes $100 - $200 per Rental so that doesn't seem that great which is $70 per Bedroom)
CoC ROI
CashFlow * Annual /Investment = CoC
$4250 / ( 20 % Downpayment + Rehab)
How do I find rehab needed without visiting a unit or Estimate ( Unit is out of state)
Lets say it needs $10,000 of Rehab
$4250 / $45800 = 9% CoC Return
Which is just below Stock Market..
BUT Brandon also said that you should ALWAYS ask for 20% below Listing Value
Lets redo the Numbers.
Property is $143,200
Rents $2075
New Mortgage $546.93
$1037 - $546 = $491.5
Cashflow = $491.5
Closer to 100$ per Unit.
Annual Cash flow $5,898 / Investment ( Downpayment + Rehab 10,000 ) $38,640
CoC Return 15%
Very good Return..
Biggest Concerns :
How do I find out what Rents really should be?
How do I figure out what Rehab should before I hire inspector to figure out if its even worth my time to consider a property.
Are my Calculations correct?