Another negative cash flow question
Would you buy this property with initial negative cash flow?
Property purchase price: 435k
5 condo units under one roof total property tax is approximately $7900. Hoping to convert back to apartments after possible purchase in hopes of saving on property tax. Important to note that there's no HOA. These are the only condos in the neighborhood.
Each unit rents for $790 currently (rents can/will be increased to $850)
20% down payment, 4.5% 30 yr mortgage
After accounting for 5% vacancy, 10% repairs, 10% Capex, and 10% property management cost, it comes to us being short approximately $110/month.
Brick building in a nice area with great tenants. New roof 4 years ago. New HVAC in 4/5 units in last 3 years. Solid B class property with great rental history. Very well maintained property with no deferred maintenance.
I have the income from primary job to cover any major expense thrown our way (including roof if worst case scenario).
Thank you all for the reply. It is much appreciated.