Help Analyze My Deal
I'm about to sign a contract on a 4 family in upstate NY. The price is $170K and I'm using an FHA 203K with 3.5% down. Here is the math:
| Rents | $37,200.00 |
| Mortgage | $11,748.00 |
| Vacancy | $3,720.00 |
| Insurance | $1,500.00 |
| Maintenance | $2,976.00 |
| Taxes | $8,000.00 |
| Management | $3,720.00 |
| Capex | $3,720.00 |
| Total Expenses | $35,384.00 |
| Income - Expenses | $1,816.00 |
| Monthly Cash Flow | $151.33 |
Am I missing anything? Other than the fact that the monthly cash flow isn't that great? The current rents are under market by about $75-$100. I think I can clean up the place and bring up the rents to market level which should bring up the cash flow.
Here's where I need a little more advice. The place needs about $20K in repairs and deferred maintenance. I have almost enough cash ( I might have another month or 2 of saving to get it all) to up the down payment to 20% and pay for the repairs out of pocket. I think I can save a little on the repairs so I would need about $50k to close and do the repairs if I go the traditional route vs $13k out of pocket to go the 203K route. The net effect by going the traditional route would be to save about $350 per month on the mortgage and PMI.
Is it better to have the increased cash flow or save my current cash for the next deal?