Good Deal?

1 Reply

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

@Scott Gullaksen Plug it into the bigger pockets rental calculator. There isn't enough numbers in your post to analyze the property. I can tell you with that much of an initial investment you should get a really good cash flow. The number you want to look at is cash on cash ROI. That's the ratio of profit to cash invested. It will tell you if you want to wait for a better deal or not. Just looking at the numbers you are giving it's impossible to give a good answer but I'm seeing too much invested for a couple hundred dollars a month RR

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