My first investment analysis

[Jason Kibbey]

Ok, so i'm new to real estate and bigger pockets and I am currently reading the ultimate beginners guide. I haven't gone through the entire guide yet but I figured that I would practice analyzing some deals the same way it was done in the "introduction to real estate analysis" example deal. 

I didn't draw out the full term and calculate total ROI but I did find some interesting things. *Disclaimer* for making this easy for my first analysis I used Zillow and I estimated a few things so feel free to give me feed back.

This deal was for 3 studios on a single property. I entered it with the full asking price. The zestimate price is almost half of what the asking price was. I used a closing cost estimator, a mortgage payment estimator, the average bakersfield vacancy rate, a 9% property managment rate, and I also assumed that no repairs would be needed to get all rentals occupied immediately ( and the seller indicates they are already filled). From the estimates I have the cash on cash ROI is about 10.79% and the cap rate is about 6.63% (although loopnet indicates a cap rate of 10%). The analysis also shows that If I payed the zestimate price that my Cap rate would be closer to 12%.

I don't know if it affects my numbers that much but I really don't know the utility costs to the owner or the actual insurance cost so I estimated.

What do you all think? and is there any way I can better figure out utility costs for owners if they have renters? and also insurance estimates?

[Melissa Dorman]

@Jason Kibbey I have some family in Tennesse and Illinois, but I'm open to where ever I can establish a team (reliable property management, agent, broker, contractor etc). I'm open for suggestions. I read an amazing article this morning by @tyrellperry on his first investment out of state that was very inspiring and definitely offers competition to bakersfield. Check it out! 

https://www.biggerpockets.com/forums/223/topics/305997-first-rental---finally-pulled-the-trigger?page=1