Single-family residence buy & hold investment.
Purchase price: $366,500
Cash invested: $73,300
Investment property near the University of Arkansas. Built in 2020, should be minimal upkeep for a few years. 4 bedrooms are leased to college students. The monthly rent is 2,800 ($700 per student). This investment has a cap rate of 6.88%. The cash-on-cash return, after a 20% down payment, is 10.11%. Monthly cash flow after expenses is $660. Couple these returns with the high appreciation rate of the area (NWA experienced 14% appreciation rate during 2021) and it's a good one!
Lessons learned? Challenges?
There is a higher monthly HOA fee that cut into the monthly cash flow a bit. This HOA fee is to completely take care of everything outside the home, good for college students and the preservation of the curb appeal and value of the investment.