Good Deal?

[Scott Gullaksen]

Hi Everyone, I have been flipping properties but wanted to start investing long term, but do not have too much experience in analyzing income properties.

I just beat out multiple bids on a property, but am kind of nervous. I have 5 days for a home inspection period to check it all out.  It is 2 bedrooms 1 bathroom with central heat.  When its renovated I should be able to get $1400/month.

The price I got it for was $125,525.  Down payment is 25% down( $31,381.25)

Closing costs will be around $7000.  

That is $38,381 out of pocket to purchase.  I plan to add central air/new heater, renovate the kitchen and bathroom, paint, and refinish the floors.  Hope to spend $20k to bring it up to speed.  

Total cash into it is $58,381.

The total mortgage payment would be $677/month.(PITI)

Rent $1400-$677/month= $723/month cash flow.

Do you see this as a good deal?  

I know I should budget for future repairs.

Thanks for your time