Here is a property I am evaluating. Numbers look decent to me. Wanted to get a gauge of whether this one rates anywhere close to good in your opinion?
SFH - 3/2 1400 sq ft, 2003 built; Suggested offer price 96K, 10K repairs, 2K closing costs
5% int, 20% down, $207.6 monthly tax, $72 monthly insurance; Estimated rent $1175.
You don't indicate what the ARV is, and it doesn't appear you are including reserves for future repairs, CapEx &/or vacancy. If I use your numbers, allow for modest vacancy & approximately 12% reserve for repairs/capex, it looks like you're looking at around $175/mo cash flow. If that meets your criteria, then it may be a good deal for you. The one thing I would say is that your closing costs may be a bit low.
Yeah, what @Hattie Dizmond said...
Also, how are you handling property management? That's a LONG way to manage a property remotely. Might want to factor in another 8% for that and the deal looks a bit on the thin side there. Property management brings your monthly cashflow down to about $90/mo which would be too low for me to want to take a shot at.
Yeah, what @Scott Nipp said too! ;-) I didn't even notice you were in CA.
Plus, since you're not local, have you had someone walk through the property? Are you confident about your rehab estimate? It seems reasonable, since the home was only built in 2003, but you certainly don't want to base your numbers solely on information from the sellers. Also, one of the reasons I brought up the ARV is that $1175/mo for a $1400 sq ft home sounds high for a lot of areas in Ft Worth. What are you basing your target rent on? It may be solid, but your deal is thin enough that $100 difference in monthly rent will wipe out most or all of your cash flow. The ARV and basic location of the property would give us more to go on in terms of analyzing the deal. I'm in Grapevine, which is an area of high desirability, and pay $1375 a month for a 1800 sq ft home that is only 1/2 mile from the lake. Just saying
Sounds OK but it depends on the area. A 2003 build sounds suburban to me...you want a house with land scarcity so it appreciates.
What are the comps looking like? What is the average DOM/months of inventory in the area/subdivision? Is it located near any major roads or commercial buildings?
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