[Calc Review] Help me analyze this deal
4 Replies
Chad Barson
from Westland Mi
posted almost 2 years ago
*This link comes directly from our calculators, based on information input by the member who posted.
I know the after repair value will be higher. This is the first deal I found that the numbers weren't in the negative. If you agree this is a good deal or bad PLEASE tell me WHY. I need help with investment/founds
Thank you for you help in advance
Chad B
Jaysen Medhurst
Rental Property Investor from Greenwich, CT
replied almost 2 years ago
@Chad Barson , this could be a good deal. I would like to see a confident ARV. What are the comps like. It doesn't make sense to spend $111k on an $83k property. Even with that good cash flow, it will take almost ~5 years to payback the upfront repair costs. Ideally, you structure this like a BRRRR, so you can pull out your investment and recycle the cash.
Your numbers look pretty good. Few things to think about:
- What repairs are you doing for the $25k? Will this enable you to charge higher rent?
- You probably won't find a 4% loan, especially if you're not going to owner-occupy.
- Your down payment is low. Most loans require 25% down on an investment property.
- Water and Sewer look high at $75/unit/month. Around me it's closer to $30. Have you confirmed this with the town? Anyway to bill this back to the tenants?
- $100/month taxes is a very round number. Confirm with the town.
- Vacancy might be a bit low (I usually figure 8%), but that's super local. Might be fine.
Chad Barson
from Westland Mi
replied almost 2 years ago
@Jaysen Medhurst First Thank you for all the great info. I'm going to be talking to a property manager about the rent tomorrow as well as a realtor.
What do you think a private lender would charge?
I'll raise the down payment to 25%
When I talk to the realtor I'll see what they say about the water and sewer and the taxes
I'll also ask the property manager about the vacancy rate.
Jaysen Medhurst
Rental Property Investor from Greenwich, CT
replied almost 2 years ago
@Chad Barson , expect a private lender to be higher than a commercial loan, 6-8% or higher probably.
Don't trust your realtor to get the taxes and W/S costs. They're going to give you a guesstimate, at best. Call the town assessor's office.
Chad Barson
from Westland Mi
replied almost 2 years ago
@Jaysen Medhurst I'll add a call to the city to the list today. Thank you.