Help with Buy & Hold, Not Understanding Numbers

7 Replies

My niche has always been raw land bought at tax deed auctions, and flipping those properties. I now have an opportunity to possibly acquire my first rental property. When I run what I think are accurate numbers I am finding that the property is a loss, I think, but not sure. 

Here is why, I think it's a good deal.

1) I get close to $200.00 in positive cash flow following the 50% rule.

2) After about $5000.00 in rehab I get $30,000 equity.

3) It's under priced for my area, 2-1s have sold for the same price in the last 6 months, and this is a 3-2. 

Here is why I think it's a bad deal.

1) The charts on the analysis graphs make it look like a money pit.

2) The age of the house. I knew the prior owner (RIP) and he took great care of the property. It's one of the nicest in the neighborhood.

3) The price, why so cheap?

Can BP nation, help me analyze this deal, tell me what I'm missing, and/or what makes it a good deal?  

Report 4 Buy & Hold

You're going to have to provide a lot more information before you're going to get intelligent responses.

ARV?

Purchase Price?

Rehab costs - $5000

Down payment?

Financing terms (length/rate)?

Taxes?

Insurance?

Expected monthly rent?

Also, have you used the analyzer here on BP?

https://www.biggerpockets.com/buy-and-hold-calculator

@Hattie Dizmond I put a link to the BP analysis report at the bottom of my first post. Please look it over and tell me what you think?

I just get a blank page, when I click that link.  Sorry.

I got a blank page also.

I'd focus on getting more concrete information on all the things you mention. Don't ever just go off a 50% rule for calculating cash flow, get a property inspection to ensure you know how much will have to go into it, etc.

Medium hipsterinvestment logo black300dpiAli Boone, Hipster Investments | [email protected] | 310‑957‑2101 | https://goo.gl/x52ZKJ

It's there it just takes a long time to load, so I have posted an image as well.

Good answers, there is a lot that goes into it. If it is a well taken care of home and the rents in the area work it could be a good deal. I agree with @Ali Boone   make sure you get an inspection. The biggest things to look at are the purchase price and what it can potentially rent for. Do you due diligence and make sure you are getting good cash flow. Hope this helps.