Just wanted thoughts on this deal. SFH 3/2 - It's a tougher part of town, higher crime rates, median household income of $30k, 48% of homes are rentals with a high participation from the national property inv co's.
Property needs no work. Rents range from $825-$925. I'm using $875 below. Value is approximately $75k. Owners are not local and don't want to deal with tenants. Sellers are kicking in $1200 to closing as well. I'm getting 30 yr $ at 4.5%.
Purchase Price -$61k
Gross Rental Income- $10,500
Operating Expense- $4,725(45%)
NOI - $5,775
Debt Service (P&I only) - $2,782
Cash flow - $2,993
Debt Service Coverage - 2.08
Cap rate - 9.5%
Cash on Cash - 38%
what percentage are you putting down to get that high have a cash on cash return? I just had a similar deal in the works in a Louisiana class c area. Long as you have a good property manager and find solid tenants I personally don't see an issue with that deal.
Good luck keep us posted on how it turns out
I'm putting down 25%, approx 15-16k.
What's the difference in a class C property/location in LA and one in GA? Whatever you say it is, because these alphabet designations are all made up.
Please drop the alphabets of location (A, B, C) and for SFR properties it's confusing to new investors and is all arbitrarily made up by the users. There is no such standard and it offers no clarity to what to expect in a location or SFR property.
Good point Robert, I could never find a definitive guide for these designations.