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.
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.
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 Property sold for 150k in 2008 but is outdated for the most part.
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