I'm about to get my first rental property under contract here, and want to run the numbers quick and make sure I'm not missing anything major.
The property is a 3 bed/2 bath in a decent neighborhood. The price I'm getting it for is $73,500 on an ARV of $80,000. I'm also getting 2% toward closing from the seller. I'm expecting around $2500 in immediate repairs, otherwise this property is just coming off of having a long-term renter and is rent-ready.
Total Cash In: $18375 (25% down) + $1600 closing + $2500 repairs = $22375
Rent: $1000/month - this is very reasonable in my area.
Mortgage (4.625, no points): $283.42
Repairs and CapEx: $150
Management Fee (the company I'm going with is 7.5%): $75
Total Expenses: $740.75
Monthly Cashflow: $259.25
Yearly Cashflow: $3111
Cap Rate: 8.4%
Thoughts? Seems like a base-hit to me in the hot market I'm currently in...the seller is motivated as they just bought a resort.
You're missing getting the property at 70% ARV or better. With that figured in you should get it at $56,000 less your repairs, for a total of $53,500. If the numbers are right and you don't mind risking depreciation in the market, you'll be okay. So plan on this being a long term hold.
Yeah, this is a long-term hold. Thanks for the feedback!
There is slight negative equity which doesn't matter since it will be a rental. Numbers look good for a rental.
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