Accountant · Richmond, VA · Member since 2015 · 7 posts · 2 votes
Hi everyone,
I am currently analysis a deal in Richmond, VA in North Chesterfield. Its a Buy and Hold. This is my first deal, I am doing a buy and hold strategy for a 3 bed 2 bath house around the Midlothian area.
Purchase Price: 150,000
Mortgage with taxes and Insurance: 740
Maintenance cost: 74/month ( had the house inspected and its in really great shape only minor cosmetic things)
Total Expense: 814
Rent Range: 1100-1300
Expected Rent:1,150
Expected Cash Flow: 336
Is this a good deal? Any advice or recommendations would be really appreciated.
Your PITI looks pretty low. Can you break out each for us.
Also you will need to set aside money each month for vacancies (1month/12months =8.3% of gross rent), CapEx (typically 275/month) and property management (even though you will managing yourself, you need to be paid)
Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
11y
@paul rolon
$1,150 rent on a $150K investment is a little low for me. I'm grew up in Richmond and visit there often. I still have a 3-1 rental in Southside that rents for $900 and will go on the market next month for $85-90K. My house probably won't have the appreciation the one you are buying will but cash flows a little better.
I like Midlothian and think it's a great area. I'd shoot for a little more rent.
Accountant · Richmond, VA · Member since 2015 · 7 posts · 2 votes
11y
I have a 3% loan 30 year fixed for up to 150k. I am going to put 12,500 down which is 7.5%, i used a VA Loan.
I was able to get a VA grant and the seller to pay all the closing cost. The mortgage is 579.71, taxes 110.38 and insurance is 50. But yeah i didn't even think of the vacancy and the cap exp. After factoring those cost with 1150 my annual return is -0.20%. Yeah this deal sucks. lol Even if I raise the rent to the max at 1,300 my return its only 5.8%. Thank you for the advice this is probably why there is so many similar listings like this one out there.
Accountant · Richmond, VA · Member since 2015 · 7 posts · 2 votes
11y
Getting the price lowered is gonna be hard giving that its a short sale. The current seller bought the house for 180k. Its a great property acre lot, with really high quality upgrades in the house. Its fit more for primary residence than renting actually.
May I ask if the 98,500 purchase price was with move-in ready or where there renovation expenses to it? 100,000 for the areas I am looking at would be so ideal.
Rental Property Investor · Richmond, VA · Member since 2015 · 128 posts · 25 votes
11y
Speaking from what I've read on other posts on this forum, but not from my own experience.... if the numbers don't look good (which they don't accoridng to most other posters here) and you can't get the seller down, then it's okay to walk away. Don't get caught up in the sunk time cost myth.
Accountant · Richmond, VA · Member since 2015 · 7 posts · 2 votes
11y
Thanks for all the advice guys, its looks like its not a good deal, I will be walking away from it. It looks like I need to shot for properties under 100k around the areas that I want to rent too, might have to do some rehab work.