3/2/2 buy and hold - first deal analysis needed

6 Replies

Home is 2006  1354 sq ft 3/2/2 in immaculate condition - walked the home, it needs literally nothing. Home is one of only three on the street less than 2000 sq ft. Kitchen appliances convey, no fridge.  Short sell offer of $95k.  Comps have come in from $115k-127k, and none were in pristine condition.  Shortsell situation.

  • HOA $250 annually
  • Taxes $2000 annually
  • FHA loan so PMI of $420 annually
  • Home owner's insurance $-500 annually
  • PM assumed 10% of rent (I will manage, but keeping it in the formula)
  • Vacancy 8.3% assumed
  • Administrative Fees $240 annually

I have utilized buy and hold spreadsheet (30yr long form) on BP Fileplace.

Home in NE San Antonio, newer homes, newer retail and GROWING.  Area of home is nearly built out, not just neighborhood, but surrounding area allows for little new home construction.  Looks to positively cash flow, rent demand outweighs the supply considerably.  What am I missing? 

Thanks in advance for helping out a true newbie. 

I think it all comes down to cash flow. How much do 3/2/2's rent for in the area? If you're comfortable with the net income then go for it.

@Timothy Edwards   Just doing a quick glance, you are missing maintenance and reserves (this is a major item), leasing fees (some people may have this rolled up into Vacancy but I separate it out). For people to give you a more complete analysis, you will need to identify the rent comps, loan terms, interest rate, closing costs, rehab costs, etc.

Sounds good to me if rents are reasonable. Let us know what happens.

You can type the address into rentometer . com and get an idea of rents in that area... I thought a FHA loan had to be used as your primary residence??

Sorry term I will have it as my primary residence initially for the first year.  I forgot to put that in as well as the comps.  Rent comps are 1100-1250. Maintenance I have at at $200 a month. There is ZERO rehab costs;  it is like new including new carpet

At rent of about $1,100 per month I calculate this as about an 8 Cap. As an investment it would work. Also, you have some equity.

Good Luck.

Bill

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