What am I missing in this deal analysis?
In the above link, would the asking price of $62,900 be a good deal as a buy & hold investor? I spend 5 mins doing a deal analysis example as advised by the newbie investor webinar by Brandon Turner. Here are the other info I researched online. What info am I missing? I know that I do not have the inspection report.
| Size | 4 bed/2 ba, 2155 sqfeet |
| Price | $62, 900 |
| Annual property taxes | 1,521.59 |
| Total rent | 1,200 |
| Property management 4 to 8% of rent | 96 |
| Profit monthly | 1,104 |
| Profit annually | 11,726.41 |
| CAP rate | 0.1864294118 |
Most Popular Reply
@Susan Tan I see a number of things. First it says sold back in October, but perhaps this is just for practice purposes.
Next your monthly income is not 1/12 of your annual income. Why don't those numbers match?
You are not considering near enough for expenses. There are a lot more expenses than just taxes and management fee. You also are figuring low for management.
It meets the 2% test so it should cash flow well but your numbers are not right. The fact that it is at about 2% monthly rent to income says this may be a higher risk area.