Analyzing properties in Gary Indiana

[Ryan Curran]

Hi, BP members

I'm starting to analyze properties in the Gary Indiana area. I'd like to purchase a sfh as my first investment.

Can someone review my analyses, I'd like to make sure I'm on the right track.

The home I'm practicing with is a 3bd, 1ba. Bi-level home. Built in the late 60's. With a fenced in backyard.  Judging from Graigs list and Realtor.com rent would be around $800.00.

From the pictures, a new refrigerator will need to be purchased and wood floors will need to be redone. I would also paint the inside walls and install new trim. The outside of the house looks pretty good.

The asking price for the home is $40,000.00

Monthly Rental Income: $800.00

Expenses:

Taxes:  $43.00 per realtor.com, I'll round up to $50.00 a month

Insurance: $100.00 a month,  just a guess

Utilities: $0 - tenants responsibility

HOA: $0

Lawn/snow:  $0 - tenants responsibility

Vacancy:  $800x.05= $40  I'll round to $50.00 a month

Repairs: $800x.05= $40  I'll round to $50.00 a month

Cap Ex: $800x.05= $40, I'll round to $50.00 a month

Property Manager:  $800x.11= $88.00, I'll round to $100.00 a month

Monthly Mortgage: $150.00 per Realtor.com

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Total expenses: $550.00

Cash Flow:

 $800.00 - $550.00= $250.00 a month

Annual cash flow: $3000.00

Cash on Cash ROI:

Down payment:  How about 25%? - $10,000.00

Closing Costs: $3,000.00? Not sure if that's too high.

Rehab budget: I think around $5,000.00?

Total investment: $18,000.00

$3,000ACF/$18,000 = .166666 = 17% Cash on Cash Return

So does this look like an accurate assessment?  Is there anything I'm missing?

Comments would be greatly appreciated.