Updated almost 7 years ago on . Most recent reply
Need help with my potential first buy.
Hello BP,
I need help analyzing this deal. This is a foreclosed condo.
Purchase price: 65,000
Estimated repairs: 14580 ($15 sq ft estimate) for carpet, paint, kitchen, light fixtures.
ARV = ~100,000 (Based on what the same condos sold for recently)
20% down payment at 4.5% over 30 years.
Property taxes ~2700 per year
Rent = 1200
Expenses = 7% vacancy, 8% cap ex, 8% repairs, 10% property management, ~ $70 for water and sewer and I assumed the HOA pays for garbage.
Monthly expenses are calculated at 1,174.01 leaving me with 25.99 in cashflow, 3.28% pro forma cap, 0.92% COCR and 5.04%. 50% and 2% rule says this is a good deal. Also, the gain in equity says this is a good deal but based on the return it isnt. Is there another way to look at this and am I over estimating my expenses. I will be managing the property myself but I like to look at everything as if I werent. Any other feed back would be nice!
Thanks,
Kwame