Hi guys, so I started getting listings from my realtor and I tried using the rental property calculator, but I'm getting weird numbers like really high ROI's. I might be doing this really wrong. Can someone give me an example of what numbers to put in based on this MLS listing? Also do you leave any blank or fill in everything?
@Jason D. yes I did. I think i'm messing up somewhere with other numbers. Do you fill in every blank?
Throw the numbers at me.... Purchase price, down payment, closing costs, loan interest and terms, taxes and insurance, and expected rent.
Purchase price: $83,300 (listing price $119,000 x .70)
Down payment: FHA Loan 3.5% down - $2,915.50
Closing costs I figured around 5% at the most? $4,165
Loan interest I did 5%
30 year term
Taxes about $700 a year
I didn't know how much to put for insurance
Rent: Unit #1- 3 BR/1BA - $800
Unit #2 - 1BR/1BA - $500
So the numbers look great, I would say about $1000/yr insurance unless you're in a high risk area. The question becomes, how do you get a property listed at $119k for $83k? It's either overpriced and only worth $83k, or it needs work to get it to an ARV of $119k. Also, remember that FHA means that you have to live there and if it needs work, FHA may not be an option. Using rough number I'm seeing about $400 cash flow, after reserves.
@Justin Lee don't forget to include vacancy, repairs, and CapX expenses when doing your calc