Updated over 10 years ago on . Most recent reply
Central Arkansas flip or buy/hold
After losing my savings on a bad deal due to my own ignorant arrogance, I'm finally ready to get back in the game. I've been studying, watching, and analyzing for over a year. I've been focusing on SFR in B and C class of central Arkansas neighborhoods, mainly in revitalization areas. My focal counties are Pulaski, Faulkner, White and surrounding areas. All three counties have major universe universities, inluding Conway - "the city of colleges" which made the list of top 50 growing cities in America. Here is the potential buy and hold property available near downtown Little Rock near the interstate.
Nice Brick home, corner lot close to Hillary Clinton Library ( 2 blocks away on same street) 2 bedrooms 1 bath. Needs minor repairs ( two broken windows from the kids next door before they moved and needs new flooring) Fenced back yard, detached garage. nice shade trees. This home is in a C class neighborhood that has already begun its revitalization after successfully chaseing off gang activity a few years ago. There is a new police precinct, road reconstruction, new home construction, and home rehabbing. Rental comps show $550-650, depending on cosmetic finishes and targeted tenants.
House Size (sq. ft) 840
Year Built 1950
Stories 1
Property Type Single Family
County Appraised Value $39,650.00
Garage Yes
Siding Material BrickMonthly Income: Monthly Expenses: Monthly Cash Flow: Pro Forma Cap Rate:
$600.00 $408.94 $191.06 13.03%
NOI Total Cash Needed Cash on Cash ROI Purchase Cap Rate
$4,561.00 $12,600.00 17.42% 16.29%
Property Information
Purchase Price: $28,000.00
Purchase Closing Costs: $3,000.00
Estimated Repair Costs: $4,000.00
Total Cost of Project: $35,000.00
After Repair Value $42,000.00
Down Payment: $5,600.00
Loan Amount: $22,400.00
Loan Points: $560.00
Loan Fees:
Amortized Over: 15 years
Loan Interest Rate: 6.00%
Monthly P&I: $189.02
Income
Rent $600.00 Other $0.00
Total $600.00
Expenses
Vacancy $18.00 Repairs $30.00
CapEx $30.00 Insurance $50.00
Management $60.00 P&I $189.02
Property Taxes $31.92
Total $408.94
Financial Projections:
Total Initial Equity: $19,600.00
Gross Rent Multiplier: 3.89
Income-Expense Ratio (2% Rule): 1.71%
Typical Cap Rate: 10.00% Debt Coverage Ratio: 2.01%
ARV based on Cap Rate: $45,610.00
50% Rule Cash Flow Estimates
Total Monthly Income: $600.00
x50% for Expenses: $300.00
Monthly Payment/Interest Payment: $189.02
Total Monthly Cashflow using 50% Rule: $110.98
Analysis Over Time
Year 1 Year 2 Year 3 Year 4 Year 10 Year 20 Year 30
Total Annual Income $7,200.00 $7,200.00 $7,200.00 $7,200.00 $7,200.00 $7,200.00 $7,200.00
Total Annual Expenses $4,907.29 $4,907.29 $4,907.29 $4,907.29 $4,907.29 $2,639.00 $2,639.00
Total Annual Cashflow $2,292.71 $2,292.71 $2,292.71 $2,292.71 $2,292.71 $4,561.00 $4,561.00
Cash on Cash ROI 17.42% 17.42% 17.42% 17.42% 17.42% 34.66% 34.66%
Property Value $43,260.00 $44,557.80 $45,894.53 $47,271.37 $56,444.49 $75,856.67 $101,945.02
Equity $21,889.02 $24,321.14 $26,850.22 $29,480.41 $47,641.13 $75,856.67 $101,945.02
Loan Balance $21,370.98 $20,236.66 $19,044.31 $17,790.96 $8,803.36 $0.00 $0.00