Sanity Check Help - and Feedback On My 1st Deal

12 Replies


I'm looking for someone to run these numbers through their Excel tool (or whatever you may use for evaluating a property) to see if they line up with the numbers I am calculating.  Please let me know what questions you have and any more info you need.

Here are the inputs:

Purchase Price:  $171,000

Interest Rate:  5.125%

Down Payment:  15%

Total Amount Brought to Closing (down payment and closing costs):  $22,875

Gross Rental Income When Bought:  $1,050

Gross Rental Income 1 Year Later:  $2,450

Monthly Water Bill I Pay:  $83

Property Management Fee:  Assuming 10%, but I manage this property for now, so for now it is 0%.  Need to include the 10% for long term growth.

Monthly Taxes:  $338

Monthly Insurance:  $90

To - Date CMA Price: $210,000

I have a ton of analysis run in my Excel spreadsheet (such as monthly cash flow, cash-on-cash return, cap rates, etc.)  I would really like to compare my numbers to someone else's spreadsheet for a sanity check.  If you could please run these numbers and post your results, it would be greatly appreciated!  

It would also be great for feedback on this scenario.  What are your veteran thoughts on this deal?  What advice would you give me for my next deal based on the above deal?  

Is this a single family residence or what?  Is the gross income $1050 per month?  You think the gross income is going to more than double in 1 year?

This is a duplex.  When I bought it, gross rents were 1050.  I've put $6,000 into it for relandscaping/upgrading and took this over from a VERY lazy landlord in a very nice area, and now I have new tenants in the building for a new gross rent of $2,450

Max James Congrats !

Oh wow, good job then.  In my humble opinion you did very well.  Especially in a higher end area.  You're going to have fewer tenant issues and potentially more appreciation going forward.  Carry on sir!

Where did you find 15% downpaymen

Thanks guys!  

I went owner occupied.  I'm currently "house hacking" again and close on a 4 family tomorrow that I am going to move into.  I just want to get some feedback on my numbers being run.  Don't want to put ALL my faith into my Excel spreadsheet for the return estimates without running it by a few people.  

You may be able to decrease taxes based on new sale price

You did a great job! Getting the rent up that high makes all the difference! 

Looks great! 
I believe that it's always good to invest in a good location with a great product and charge a premium. 

Can you share what exactly what was done in order to more than double the rent?

Great job. I hope my first deal goes this well.

@Tomer Ravid the previous landlord was charging $525/month in an area where market rent 5 years ago was $850/mnth for a similar apartment (2 bed 1 bath).

What I did was put in over 100 hours of landscaping work, upgraded the appliances, upgraded the kitchens and baths (all as cheaply as possible, for example, I painted pink tile white, used thermoplastic panels and liquid nailed them over the old tile backsplash, laid down new vinyl floors over the old nasty vinyl, etc) and was able to take very nice pictures and market the property very well.

I also allow dogs, so that is a huge competitive advantage in the area. It really was a matter of posting a high rent online way in advance of when I needed new tenants. That way you have more time to place a tenant and don't have to worry about time as much. I had leases signed way in advance.

What I'm calculating for my results are as follows:

Cash flow per year excluding property management: $10,541

Cash on cash return: 27%

Cap rate: 10%

2% rule: 1.43%

Cash flow per year including a future property manager: $7,601

Cash flow per year looking only at PITI: $14,762

These look good on paper, but I want to make sure my calculations are right, want to see if other people calculate these same numbers. Thanks in advance!

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