South Ogden Rental Analysis

[Jace Thornton]

It has begun. I just analyzed my first property in South Ogden and I would like to get some input on things that I did right and definitely the things that I did wrong. Any and all advice is appreciated. Just to provide a little background to give you the biggest picture possible. I am an Air Force Vet that has access to VA loans. I would like to use the VA loan to purchase a house and live in it while I am fixing it up. Therefore the only thing that would need to come out of pocket would need to be the repair fees. I would like to use the Brrr method to get equity out of the home.

Property Location: South Ogden, UT 84403

Address: 3623 S Porter

MLS: 1346577

Purchase Price: $90,000 (Short Sale w/no offer pending)

Closing Cost: $3,000

Estimated Repairs: 20K to 30K (Needs new floors, paint and the basement (1070 Sq Ft) needs to be finished.)

Monthly expenses: $915 (10% for vacancy, property management, repairs, capex, property tax, and P&I)

Projected Monthly Income: 1K(When Rented)(Being that I am in the military I get $1,305 per month for housing)

Total Cash Needed: 33K

Cash on Cash ROI: 3.06%

Monthly Cashflow: $84.18

Pro Forma Cap Rate: 4.88% (Not sure what this is.)

Purchase Cap Rate: 6.67% (Not sure what this is either.)

This would be a 30 yr fixed rate VA loan.

One thing that I was not sure about was how to determine the property tax and the projected rental income after about a year of living there. Please let me know how far off the mark I am. Thanks in advance and I look forward to reading what you have to say. 

[Jeremy Robinson]

short sales with a VA loan are almost impossible. I found that out recently. If the property had investment potential others will also offer, and a va loan is usually the last one looked at because of the requirements associated with it. I just posted my story if your interested how some of the process goes.

Sorry ales can take a very long time, sometimes up to a year. It's very possible that the bank will assess the house and come back at a higher price. Short sales also are sold as is, so if the VA appraiser finds problems, you would have to fix then it off your pocket before the loan would even be approved, a very risky situation to be in.

Best of luck to you, I have to au it is a very rewarding process!