Newbie deal analysis

[Meti Kay]

First time investor and have been going crazy looking for deals in NY/NJ.. I have been leading towards NJ since the numbers make the most sense even though taxes are high.. it is also a 30 min drive that makes it appealing for me... here are the numbers It's a 3 br 2 bath Listed for 85k Needs about 20k to put it in rentable shape Taxes are 5200 a year Comps are in the 160k range (very conservative) I'm playing to use conventional 20/80 financing and use my own funds and refinance in 6-12 months All in all takeover costs I'm figuring 110k give or take Market rents on a 3 bed 2 bath is $1700 If the numbers are correct I should be able to cashflow around $500 a month Anything I'm missing here???

[Brent Coombs]

Originally posted by @Meti Kay:

Left about 250 m monthly for that cushion (repairs).. maybe seem a bit low but I'm hoping to prove many things during the rehab plus I'm a bit handy myself unless it's something major but we all worry about that in this business that's whole risk aspect we take into consideration.. my real worry is the refinance down the line and the appraisal then

Once it appraises for $160k (are you worried it won't?), and you can refi 70% ($112k) which gets you all your deposit back, the MAIN issue for you may well be: will it STILL cash flow positively? 

ie. Your Principal and Interest payments would go up a further $235+/m after the refi! 

But so long as all your numbers ARE conservative, and correct calculations would NOT result in a negative cash flow, then arguably - you SHOULD buy it! 

Why? Because you'd have ALL your original deposit back (so you can REPEAT), and, your Tenants would be paying off your loan AND expenses for you anyway! Cheers...