I'm fairly new to the whole rental side of investing so I'm a little confused. I have a deal that I came across a 4/2 1400sf SFH in a desired section 8 area that would rent for around 1k- 1150/month, purchase price would be 66.5k and taxes would be around 1200 annually with no more than 2500 rehab and ARV at 80k. Is this a good cash flowing deal? How is this calculated. If so what would be the max I could pass it to an buy/hold investor for?
Here Kevin, just use the rental investment worksheet that Josh posted to run the numbers
You are asking for hypothetical numbers on what you could sell it to a buy and hold investor for. No disrespect but as a someone who is new to the rental side no one can be sure how accurate your projected numbers are and if you have performed your due diligence on the property.
@Jeff B. :
The numbers are correct due to my research and knowing the area that's the easy part, I'm just new on the aspect of calculating rentals as far as cash flow and would it be a good investment to pass along. Could you give me and example of numbers an average rental property? I'll also look into using the calculators. Thanks
I ran it through a spread sheet that I use to evaluate my potential rentals. I assumed a lot of the expenses that weren't provided but it really comes down to if you are going to finance or not. No finance then it will cash flow just fine (but you will not be leveraging your money) but if you do max out your leverage then it will probably not cash flow. Any property can cash flow if you do not use OPM.
Adam B. I've found out if I used 70 x Rent - repairs - wholesale is what I should be getting the deal for which should be around 61k and then I would be able to pass it along to an investor at 1.5% of rent at 67k which is an average rental cash flow. I'm going to pass on this one since the asking price is firm at 66k, too high for me to work with. Thanks for your input Adam
When looking at property....... Keep in my mind that the house has to be in working order to be able to obtain financing.
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