New rental cash flow analysis, now what?

4 Replies

Good evening everyone! I wanted to share the details of my latest rental now that its closed and a tenant is in and can make accurate calculations. By the way, why is the BOLD function so glitchy? As soon as I bold one thing, I basically have to bold everything from here on out. And I cannot unbold anything once I've bolded it.


2/1/2 Condo

Purchase price: $148,300 cash 

Closing costs: $1049.19

Improvements: $190.00

Investment all in: $149,539

Rental income: $1750/mo. $20,790/yr. (assuming 1% vacancy, historically its been 0%)

Total expenses: $9111/year (maintenance fees, taxes, insurance, 10% of rent for repairs and PM, repairs are typically <<5% for condos, myself/family is the PM)

NOI: $11,679

Cash ROI: 7.81% with PM (9.20% doing own PM)


ROI is very nice for Hawaii, but still not great compared to about 21% if I had financed 80% of the purchase price.

Is a HELOC or cash-out refi a good idea? I would love to hear your feedback and expertise. Have a blessed day.

@Andrey Y.   Good job man!  Where did you buy?  

As for your question I have no clue what I would do in your situation hahah, honestly though I would probably just sit on it and wait till I found a deal, then do a HELOC or refi. In the mean time just let the money roll in.

In my opinion, you should always allocate a management fee-even if you manage yourself. Someday, you could move away or become disabled. Any buyer considering purchase of your rental will surely include management in his calculations.

I think you just sit on this one and enjoy the magnificence of landlording! LOL

Typically your return is much higher on a leveraged deal because your return is calculated on the actual money you have in the deal.  A wise strategy is to purchase property at 25% below market value that will cash-flow with a strong return that justifies a mortgage that will cash you out of the deal.  

I call this responsible leveraging.  If done correctly you should able to build a portfolio with none of  your own money in the deal.  Obviously this only works if you are bankable and if you have see money to start.

10% PM, 5% Vacancy, 5% Maintenance always.

Originally posted by @Joseph Ball :

In my opinion, you should always allocate a management fee-even if you manage yourself. Someday, you could move away or become disabled. Any buyer considering purchase of your rental will surely include management in his calculations.

I think you just sit on this one and enjoy the magnificence of landlording! LOL

 That's a great point, thank you! Maybe looking at the glass half-full isn't the best thing in every situation.

Magnificence? I always thought B&H was easy. You get tenants in and don't hear from them for 3 years at a time, and just watch the cash flow ;)