Updated over 10 years ago on . Most recent reply
Feedback on Buy and Hold Analysis
Hey All,
My wife and I are looking to develop a portfolio of rentals in the northern portion of California's Central Valley (Sacramento and surrounding areas). I have been practicing analyzing cash flow on some of these properties and I need some feedback from those with experience.
I have included a breakdown on a property that I have located on Realtor.com, a quad in Modesto:
| Purchase Price | $ 305,000.00 |
| Mortgage (20% Down) | $ 1218.00 |
| Assessed Value | $ 305,000.00 |
| Tax Rate | 1.3% |
| Taxes per Mo. | $ 330.42 |
| Gross Income* | $ 34,000.00* |
| Gross Profit | $ 2,833.33 |
| Maint. | $ 100.00 |
| Management Rate | 10% |
| Management Cost per Mo. | $ 250.00 |
| Insurance | $ 80.00 |
| Expenses Total | $2011.75 |
| Monthly profit | $ 821.58 |
*The Gross is calculated using a rent of $825 per unit. Four units (quad) = $3300 per month or $39600 per year. I then deducted $5600 from the gross to account for utilities not paid by the tenants and other misc. expenses. This is what I am calling Operating Expenses.
I am not sure how to appropriately account for Operating Expenses and vacancy.
Other than the above, is there anything else I missed? And, would this be a profitable property? Is this realistic?
I am not buying this place, I am simply interested in seeing if my analysis needs tweaking.
Thanks!