First rental property in New Hamphire, do these numbers seem good?
Hi everyone, I am under contract on a three family in Manchester, NH, I feel pretty good about the numbers but would like some reassurance that I'm not underestimating and its a deal worth going through on. My home inspection is tomorrow so I am getting nervous.
2 units are currently rented, one 3 bedroom at $1200 a month, and a 2 bedroom at $650 a month, we plan to owner occupy the 2 bedroom rented for $650 which is under market, it should rent for $800, once the lease expires we will give them notice and take over the unit. There is one vacant 3 bedroom that should also rent for $1200. I am analyzing this as if it was fully rented at market value. The building also has a coin op washer and dryer, I am not including this as I am not sure how much money they will generate.
total rent $3200
purchase price $232,260 ($237,000 with 2% seller paid closing costs)
mortgage: $1,100 ( we are doing 10% down with FHA, this is including the PMI)
taxes $389
insurance $127
landlord paid utilies ( water/sewer and house electric meter for common areas): $80
maintenance/capex: $500
vacancy: 8% $256
Cash Flow montly: $748
From what I have read most people on here are aiming for $200 a month per door this exceeds this requirement
Cap rate 9.56
Cash on Cash return ($8,976/$23,700): 37%
This seems like a solid investment to me, its an older building, built in 1910 which is common for the area, but the basement and structure seems to be in good shape. Newer vinyl siding, windows, units are updated and in good condition. I will probably invest $1000 to improving the current area for coin op laundry to tenants use the area as opposed to going to the laundromat, and it could probably use a roof with in the next 5 years which worries me.
Once we owner occupy we will be doing snow removal/lawn care ourselves which will help reduce costs further.
What does everyone think? Do these seem like realistic numbers or am I underestimating costs?