Analyze sfh

5 Replies

I got an offer accepted at 66,000 for a sfh 4 bed 2 full bath. I estimate about 10k to fix it up.  Rent will fetch 1000-1100 per month. Taxes are 2500 per year. I am putting 20% down at borrowing rate of 4.625. Does this seem like a good buy and hold?

Be sure to include all expenses.  Besides, taxes, you have insurance, management, maintenance, capital reserves, and vacancies.  I estimate the total to be $6,300 to $7.780.

Based on your loan rate I would want a cap rate around 7.625.  Based on this it would not be a deal for me at that price.

Good Luck.

Bill

insurance is 415 a year and I wont need management fees since I will be self managing.  does that change your opinion at all?

I now calculate the value at about $75,000 counting purchase price and rehab.  I do not give additional value to the house just because you are going to self-manage.  Of course you will make more money if you add your labor.

Good Luck.

Bill

don't forget to comp out the property as a safety valve in case rents or neighborhood changes. also try to project appreciation numbers for 1- 5 years . What is the properties sale history over a number of years ,similar sales, those for sales etc

I think appreciation is likely. House appraised for 126k and similar homes on the street and in neighborhood are selling for 130-160 depending on the the condition.  Property sold for 150k in 2008 but is outdated for the most part.