Hello BP nation!
I am working on a deal for my first rental property right now. Please help take a look if the numbers make sense. This is a SFH deal.
Offer Price: $110,000
LTV 75% with 4.75% interest.
Amount I put down: $27,500
Loan Amount: $82,500
Rent comps from Agent/Zillow/Hotpads: $1,250
The following are expenses :
Vacancy: 10% - $1,500
Maintenance/Repair: 10% of annual income - $1,500
PM: 8% (will be doing this myself but included just incase) - $1,080
Improvement: $5,000 (minor but needed to bring up standard for rent income)
Closing Costs: Estimate at 4.5% ($4950)
Not sure if this is too conservative but do cashflow $104/month.
Thank you for your time.
Excluding vacancy, maintenance, and PM you're at ~14.5%. You can find 20% or more in many areas around Houston. It's positive cash flow, but you should aim higher.
Thanks @Doug McLeod ,
This is a bit more average deal from the dozen that I've looked at recently. I am exploring rural locations but not sure about vacancy and rent rate compare to more active but competitive areas around Houston. Anyhow, good deals take time but thought that this maybe a good start.
Agent advised not to lower current offer price due to hot location but will have to see about that.
Personally I wouldn't take that deal not enough cash flow. But if you're comfortable with that and it works with your strategy then go for it. I'm not familiar with that area but I think you can do better. On a property of that amount closing costs would be close to 9000, that is in my area though.
Hi @Eric T. ,
I definitely you can find something better here in Houston. I myself am finding deals over 20% all the time.
Let me know if you have any questions.
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