SFR in Chicago 4br/2ba First Deal

[Karim Karawia]

H,

I'm hoping to find get some advice on a this deal I'm looking at in the Chicago, IL area.  It would be my first deal and want to make sure that I make the right decision before I acquire it. My investing goal is to Buy and Hold.  Below is the Deal that is on the table that I need help making a decision on.  Any help would be greatly appreciated.  Open to direct/personal message too.

SFR - Zip Code - 60620

4bd/2ba - Current rent is 1300

Owner Financing:

Purchase Price - 78k

Estimated Market Value -100k

15k Down

10 Year Amortized Monthly Payments with a 4 year balloon payment.

I've estimated Expenses being $360-$370 a month (including property management)

Cashflow estimated would be around $260

Best,

Karim

[Sarah Ziehr]

What makes you think the market value is $100k? Homes in that area tend to sell for $40k or $140k but not much in between. 

Are the tenants current on the rent? How long have they been there? What is the vacancy rate? 

Your expenses seem awfully low seeing as most property managers take 7% off the top, taxes are likely $2k per year and water bill is likely another $1k. Also have you accounted for snow removal? 

With the numbers you give, that is a 17 cap rate which is outstanding, but like Nick points out, there may be better ways to leverage your $15k.