Would You Buy House w Asbestos Exterior?
Guys/Gals,
Evaluating the deal listed below. The big thing with this, other than the normal deal analysis, is that it's listed as having Asbestos exterior siding (on PVA website). The house has vinyl covering the exterior (not sure if this makes a difference). Would you buy a house w asbestos exterior siding covered by vinyl??
List Price: $42,500
Offer Price: $31,875, requesting lender to pay all title costs (to keep loan amt w/in limits)
INCOME
Gross Monthly Rent: $650
EXPENSES
Vacancy Loss (@8% or 1 month/yr): $52/mo
Cap-Ex (@10%): $65/mo
Property Mgmt (@10%): 65/mo
Property Taxes (at current PVA; will likely go down after purchase): $83/mo
Ongoing Repairs (@10%): $65/mo
Insurance (estimated): $75/mo
Total Monthly Expenses: $405
DEBT SERVICE
15% down, 30 year loan, 5% (high estimate) interest rate, P&I: $145/mo
TOTAL EXPENSES: $550/mo
TOTAL ESTIMATED MONTHLY CASHFLOW: $100/mo
REPAIRS NEEDED FOR RENT-READINESS - Budget: $5,000 out-of-pocket
Outside: replace deck; fix holes in vinyl siding (a few of them).
Kitchen: replace (gas) water heater; buy refridgerator + range.
Living Room: re-do floors (cheap vinyl stuff) and some windows.
1 Bathroom: buy/install sink; fix/replace tub; re-do floor (cheap tile).
2 Bedrooms: re-do floors (cheap vinyl stuff or carpet); buy/install closet doors and rod
Estimating $5,000 to do it all. Might be a little more, depending on who I use. I will not do any repairs myself.
CASH OUTPUT: $4,781 down + $5,000 rehab + $1,600 closing costs = $11,381 outlay.
CASH FLOW: $100/month x 12 months = $1,200 annual cash return.
Cash-on-Cash Return: 10.54%
Thoughts?