Is My Math Accurate? Houston Deal Anaylsis
Hello BP Community
I found a deal and contacted the wholesaler who had the property under contract. He provided me with the property breakdown and utility costs. The lead consists of two properties being sold as a package. Property A is a duplex with a single family home and property B lot consists of a triplex with a garage that has two efficiency units. What I'm questioning is if the numbers check out and the property is in a Class D neighborhood according to the city would this still make a good deal. Also I'm not sure if I may have left something out of my calculations or if I should take anything else into account. My end goal is to have properties that generate minimum $200 cash flow a month.
Please let me know your thoughts, I'm not sure if I'm missing something in my calculations. Also I calculated the numbers below based on a loan term for a package deal. Is it possible to get a loan term with a lender that covers multiple properties sold together as a package?
| Cost Assumptions | |
| Purchase Price | $285,000.00 |
| Closing Costs at 4% | $11,400.00 |
| Total Cost | $296,400.00 |
| Mortgage at 30yr/5% Interest /20% down | $1,223.95 |
| Monthly Expenses | |
| Monthly Rent | $4,500.00 |
| Electric | $250.00 |
| Water | $200.00 |
| Trash | $100.00 |
| Vacany Rate 8% | $360.00 |
| Maintenance 8% | $360.00 |
| Property Manager 10% | $450.00 |
| Insurance | $300.00 |
| Monthly Property Taxes Due | $121.97 |
| Cap Ex Reserve 7% | $315.00 |
| Total Monthly Expenses | $2,456.97 |
| Less Mortgage Payment | $1,223.95 |
| Theoretical Cash Flow | $819.08 |
| Cap Rate | Cash On Cash |
| 8.6 | 14.37 |