Looking at this Condo, good deal?

3 Replies

I am looking to purchase a condo in a decent area, imo ( Phoenix AZ).

Currently it is on the auction site Hudzu.com. Currect bid is $42k. Asking price is $60k.

Here are the numbers based on a $50k purchase price:

Cost Assumptions Purchase Price $50,000

Improvements $2,000 ( Tear out 2 bedr carpet + paint + misc )

Closing Costs $2,848  Auction site fees of 4.5% plus $299 Doc.

Total Cost $54,848

Finance Amt $40,000

Downpayment Amt $10,000

Cash Outlay $14,848

Revenue Assumptions Monthly Rent $675 ( Average for complex )

Vacancy Rate 8%

Annual Cash Flow $3,233 

Cash ROI 21.77%

Total ROI 24.51%

Condos charge HOA fees. I would also add 8% for PM even if managing yourself, 2.5% for CapEx and 2-4% for repairs depending on how new the construction. Given that, now what do the #s look like.

Hey thanks for the response.

HOA is included in the numbers, of $166/mo, as well as insurance, taxes and utilities.

Here are numbers with the 2.5% Capx and 2% maint. and 8% property management.

Annual Cash Flow $689 

Cash ROI 4.64%

Total ROI 7.37%

I do plan on managing this myself though. Numbers without PM:

Annual Cash Flow $2,533 

Cash ROI 17.06%

Total ROI 19.79%

Originally posted by @A Schweda :

Hey thanks for the response.

HOA is included in the numbers, of $166/mo, as well as insurance, taxes and utilities.

Here are numbers with the 2.5% Capx and 2% maint. and 8% property management.

Annual Cash Flow $689 

Cash ROI 4.64%

Total ROI 7.37%

I do plan on managing this myself though. Numbers without PM:

Annual Cash Flow $2,533 

Cash ROI 17.06%

Total ROI 19.79%

 :) More typical numbers. I would say if you don't think it would be much trouble and its newish (1980s) construction, go for it. Good luck!

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