I'm about to jump into my first real property and I want to know if I am overestimating expenses. It's a 3 family for $70K and rents are generating $2100 per month. The property needs about $20K worth of work. I have all the current owners expenses (tenants pay their own electric), so I know those are accurate. But, am I overestimating on the accrued expenses like vacancy, maintenance, ect?
You may have noticed that there is no figure for financing or mortgage expenses. The down payment and rehab money would come out of pocket (about $27K) and the owner will carry the mortgage for a few years which would allow me the time to fix up the place a bit and refinance into a conventional 30 year. The ARV woudl be $130K. I would estimate the mortgage expense to be about $300 per month on a $65K-ish mortgage. If I'm correct on the accrued expenses, it's not really a deal worth doing so I need a little BP community help.
As soon as I posted the topic, my spreadsheet got jumbled. Here is the text version:
Total Expenses $1,836.00
Monthly Cash $264.00
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