what am I missing? First deal numbers.

[Justin K.]

Hello all,

I have been doing quite a bit of research lately and am within a few months of pulling the trigger on my first property. My question is, here in Fort Wayne, IN there are quite a few homes around the 15-30k range that pull 450-600/mo in rent. The cap rates on these run above 10% every time I calculate it. These properties are downtown but not in the worst part of town. Why would I not pursue these types of the deals with the high cap rates?

Cap Rate
Net Annual Income	2868
Purchase Price	20,000.00
Cap Rate	0.1434

Annual Expenses	Rent
Taxes	312	5400	Annual
HOA	0	450	Month
Insurance	600
Management fee	540
Vacancy	540
Repairs	540
Mortgage	0
2532

Any insight would be great!

Thank you,

J