Help looking at my first deal

[Account Closed]

Im looking at a townhouse investment. This is my first potential deal. I like it for several reasons. For one, it appears to be virtually turnkey. This is a new townhouse development that is not yet complete in construction. They've already sold 30% of their inventory, and leased every unit except for one so far, and they have gotten their $2,400 rent price on all units. The seller/developer has his own property management company that will handle this property, and currently handles other properties in the surrounding area. Below is an overview of the numbers.

• 4bed/4.5bath    
• 1,760sq ft    
• Attached 1st level garage    
• Private fenced and grass backyard for each unit
• Modern appliances and design
• Community amenities such as pool and bbq areas

Initial Investment:

• Asking price: $239,900
• Initial Investment: $48,000 (20% down) + $8,000 (closing cost est)
  • $56,000 total

Monthly Income:

• Rental rate: $2,400

Monthly Expenses:

• HOA Monthly fee: $125
  • Covers everything exterior... painting, fencing, mowing, etc
• Projected taxes: $450/month
• Hazard Insurance: $55/month
• Management company: $168 (7%) 
• Projected Mortgage Note: 30yr note assuming fixed 4.5% interest rate
  • $970
• TOTAL: $1,768/month

Net Cash Flow: $632/month

Does anyone have any initial thoughts or things I may be overlooking? I would likely be looking to hold this for 5 years and then evaluate the market. Obviously, I would be willing to adjust my exit strategy dependent on the market. 

[Raul Matas]

@Ty - I agree with Tyler when it comes to the rental rate; who are you getting this information from? If it's the developer/seller/property manager I'd try to get a local realtor to get you a market analysis to confirm the potential rental rate.

Raul