Is This a Good First investment Property?

7 Replies

Hey guys,

I've been working really hard to find a property that is worth  buying. 

I need you your help assuring me if this is a good or bad deal.

Asking price is right under $200k

Here is the number. Please tell me what you think.

$180k 

45,000 down

135,000 /30 years @5% ($725/month)

Taxes : 7700/yr ($642/month)

Insurance: $1,000 yr (est)

Public Sewer: Unknown at this time

Gross income fully rented $30,240

Breakdown: 

Unit 1: $750

Unit 2: $770

Unit 3: $1000

Current landlord says some utilities are included in current rents. (Gas, water and trash included).

I didnt take out for maintence or vacancy. 

Fully rented i will be looking at over $10k a year. Is that a good thing? 

It looks like a good starter but im just really confused.

What is your opinion? Am i in the RED? 

Thank you all

CJ

yes, is that too high ? It seemed steep from the start. They have school taxes and property taxes. Most of school  tax $5000. Do you think i can get a tax deduction going to the town? 

@Cody Jensen i believe those taxes could very well be accurate also. Here in Pittsburgh if you purchase the property below what the assessed value is then you can appeal the value and most likely reduce your taxes. Look into that for the area you are in.

If you account for repairs, utilities, vacancy, large items like roof and furnaces and also factor in a management fee there is not much cash flow left on this property. Just make sure you are factoring all the variables before pulling the trigger

It's a negative deal in my opinion. Monthly income is $2500. PITI is $1600, so were at $900. you paying gas and water is probably another $100 × 3, down to $600. Maintenance and Capex, depending on the age of the property could be $300 - $500 month, down to $100. Vacancy I would reserve a minimum of $200 at least for the first year, so now are in the red. Management will be $250, so now were REALLY in the red. I say move onto the next deal