Getting Closer to 1st Purchase - Can you help validate my numbers
I am looking at a property that is listed at 84,000, 895sq ft, 3/1, block, built in '85 on the MLS. The intention is to buy, hold, rent.
There is a tenant with lease until 2/2020 paying $925 /mth. Home has been partially updated (looks like floors). The kitchen looks to be original but is in ok condition.
I am calculating a 8.5% cap rate and 12% CoC at list price with 7.5k in rehab/other costs. I probably would pass on this except that there is already a tenant and initially does not look to need major rebab. I am not sure what I should be estimating for closing cost yet (using 2.5% right now). I would estimate ARV as 90k. The home is in a working class neighborhood with a mix of smaller homes like this one and mobile homes.
Thoughts? thank you.