Updated almost 6 years ago on . Most recent reply
HELP! Is this a good deal?
So I found a property in a nice neighborhood in Portland, Oregon. This would be my first deal. Asking price is $475,000 and it's a 3BR home with a separate entry 2-3BR in law sweet downstairs. The place needs some work to get it ready for rental, I'm thinking about $30,000. I think the house would rent for about $2000-$2100 and the ADU would rent for about $1500-$1600. I would be using a 3.5% FHA with $16,625 down. Here are the numbers I've calculated.
Rental income $3600
Monthly expenses $3225 (5% vacancy, 5% Cap Ex, $100 repairs)
Cash Flow $345
Rehab $30,000
Total Investment $51,625
ROI 8.02
Cap Rate 6.71
Any thoughts on whether this would be a first good deal? Thanks in advance!
Most Popular Reply
@Lance Nelson On the surface, this doesn't sound like a very good deal. You haven't allocated enough for your expenses. Your monthly out of pocket will be higher than you think. You won't be able to take anything out on a refi based on 80% Loan to Value.