Calculating expenses/Cash Flow, what am I missing?
I’ve been learning how to quickly evaluate real estate investment properties and determine potential deals. I wanted to provide a sample property that I have evaluated and was wondering if there was any insight as to what I’m missing? Is there anything I can improve on in terms of accounting for costs?
The details:
List: $150,000
Down Payment: $30,000/ 20%
Closing Costs: $4,500/3%
Initial Investment: $34,500
No of Units: 2 (Both Currently Occupied)
Annual Rent: $20,100
Expenses
Property Taxes: $447.58 mo/ $5,371 year
Homeowners Ins: $59 mo/ $708 year
CapEx: $168/10%
Vacancy: $168/10%
Total: $842.58
Net: $1,675 mo
Total Cost (Mortgage plus Op Ex) $1,477.58
Cash Flow: $197.42mo/ $2,369.04 Year
CoCRoi: $2,369.04/$34,000= 7%
That’s what I have for evaluating a property with what I know. Is there any other factors you would put into play that I might be missing? The Return rate is low so already I think it’s not a great deal. What other expenses should I factor in, what else should I factor in?