Long term rental analysis help

2 Replies

I found a nice home in asheville NC that I would like to add to my portfolio. I currently own a similar rental a mile closer to downtown I bought 3 years ago. This is a B- neighborhood in my opinion and a nice small home with no major structural issues and in my current state having 3 young kids would need just the right amount of minor work to add a touch of sweat equity without getting in over my head. Here are my numbers and some pics. Please let me know what you think!

$165.000 asking

$140,000 purchase price cash offer

Cash out refi 3-6 months after purchase. Leave 25% 35k down payment + 12-15k for upgrades in. $35k-50k invested

Rent for $1200 month long term rental = $14,400 year

Mortgage payment $675 ($8,100 year)

Repairs + vacancy $150month ($1,800 year)

$14,400 - $8,100+$1,800=

$4,500 cash flow a year($375 month)

Repairs

$3500 roof ($2,750) may not need right away, contingent

$6000 Hvac without ducting($7k) required

$2000 replace 2 foundation supports, Required now

$100 interior paint (my labor)

Clean gutters $0 (my labor)

Optional upgrades

Stacking washer dryer $1,100? may not need right away

Open up kitchen to living (non structural) (2k) not necessity but would make home much nicer and rent higher)

$750 range

$500 granite

$500 island cabinet

$250 flooring patch+ paint

Please feel free to let me know any critiques or thoughts. My goal is to start with 5 SFH. This would make a solid base hit #2 but I'd love to hear your feedback. Thanks in advance!

Is granite necessary in a B class home? Or is it something you like for personal reasons? Also, is supplying laundry machines a thing in your area? It's not in my markets.

It sounds like a decent deal to me but I think your payments might be a little low for a non owner occupied property with a cash out refinance. i would think your rate would be closer to 6%. Maybe you just have a great lender. I would rethink the washer and dryer and granite also. It sounds like you are alotting $500 for granite on an island that you are going to install but will it match the other counter tops? good luck whatever you do!