Investor/Agent · Kansas City, MO · Member since 2017 · 291 posts · 308 votes
7y
@Brandon Arnett...First off I would start using an online calculator on BP or somewhere else whenever possible. It will help ensure you calculations are correct.
At first glance, $1500 in rent for a 260k+ property isn't a deal that I wouldn't as the numbers are very tight in my opinion. I don't know what goes into the $1,200 a month in costs. Is that your mortgage, taxes and insurance number? If so what about repairs & maintenance? Again, not knowing your market but most investors will tell you to not bank on appreciation and I see you have it at 8% per year. This is pretty risky, especially if you plan on exiting the deal in 3 years. What if that doesn't happen? I don't see anything in here for sales costs like 6% agent commissions, closing costs, etc. There are a number of assumptions made that I think make this deal very risky. If everything goes well in 3 years you'll have made just under 12k in cash flow for your 52k down payment, but you hope to walk away with over 2.5 times your original investment. This is a speculation deal.
The math appears to be correct. I just don't think the way you went about using the math is.