Real Estate Investor · Cumming, GA · Member since 2017 · 10 posts · 0 votes
Hi Guys,
We did our first deal before I come and read much about REI in BP. I used different calculators, But in a long run is it a good deal or not I'm not sure. The property located in northern suburbs if Atlanta. Here are some info,
Purchase price: $160K
DownPayment: $40K (25% Down)
Closing cost:$5K
Repair Cost: $0
Expenses:
Mortgage payments: $860/Month (Includes P&I, Escrow for insurance & Tax)
HOA: $230/Month
Income:
Rent:$1450/Month
Market was good so no Vacancy this time. But could be in the future.
It Leaves about $360/Month cash flow. My loan was traditional loan with a Mortgage company with 25% down. We wanted to be conservative found the in MLS with a help of an Agent. We bought a turnkey property with almost on the Market rate.
Covington, GA · Member since 2014 · 295 posts · 93 votes
9y
Hi Sivarajasekaran. Welcome to BP and congrats on your purchase. From my initial look, I didn’t see a budget for things such as Repairs(future), Capital Expenditures, Vacancy(future), and Property Management. You may find that when you factor these items into your analysis, your cashflow will be lower than $360/mo, and possibly negative in some cases. I would factor those in because sooner or later they will become an issue. Other than that, I don’t see any issues with your numbers. Good Luck.
Investor · Springfield, MA · Member since 2010 · 276 posts · 84 votes
9y
What is a good deal for someone might not be for another.
For example for me this deal is too tight and it would be a very long time for me to get my money back ( if you actually profit $360/mo, which I think is optimistic, it would take over 9 years to get me initial investment back from cash flow ).
With every investment I ask what are my goals? And let that help guide me to good deals that fit those goals.
It all really depends on your market and goals. In Northern CA any cash flowing property is a great buy. I did however notice you did not write down expenses (taxes, maintenance, etc). You will have these. It is unavoidable.
I also would put money toward capital expenses. You don't want to pay for a surprise 10-20k roof or 4k water heater out of pocket. Also unavoidable.
This will most likely cut your cash flow down a bit.
Like i said thou. If you can make it cash flow then it is a good deal. As long as the tenants pay the mortgage then hold it for 30 years and then count it as your retirement or sell it in a few years if the market keeps going up.