How do I figure ROI or cap rates on a rental property?
Hello, everyone.
I am new to real estate, so I need some advice. I am confused as to ROI and cap rates. I know that we have a good deal, but I would appreciate somebody breaking down the numbers for me. We purchased a property for $5,000. It needs about $3,000 in repairs (per contractor) to have rent ready. County tax assessed at $38,000. We want to sell it as is for $25,000 cash or $30,000 financed at 10% for 10 years with 10% down. Numbers are as follows...
$3,000 down with a note for $27,000
$356.81/m mortgage
$ 93.14/m taxes
$ 40.00/m Insurance
Total expense = $489.95
Total Income = $600.00
+ cash flow = $110.05
Would this be a good deal for another investor? (We have other similar properties waiting to be sold.) All advice would be greatly appreciated.