Deal Analysis - Kansas City Class C property

[Joseph Dzwiniarski]

My girlfriend and I visited Kansas City last month and have been on the hunt for potential properties in the area. I've been in negotiation with an owner of a C-class duplex in Independance. We finally settled on a price of $100k for the property and all that I need to do now is sign the purchase and sale. Surprisingly, the property is in very good shape and the majority of the big ticket renovations have been updated within the last year. Tenants pay all utilities and one of the units is rented for $750. The other unit I'm going to have my PM put on the market ASAP and will hopefully have leased before closing. I've included that placement fee in the management line item. Market rents are around $800 during the summer months, but I've been using conservative estimates in my numbers. Anything bigger is only upside potential.  I've been crunching numbers and came up with the following. Please feel free to critique my numbers. The only thing that scares me about this property is that margins are thin about 3k per year so anything that I missed may make this deal less desirable. Also, I'm a CPA, so luckily I can do my own taxes and don't have to worry about bookkeeping costs.

[Jay Hinrichs]

@Matt R.  A b C D is also a function of AGE.. I have seen brand new habitat homes built in the hood that given the age would be A's but given the neighborhood are C or D..

conversely we see 100 year old homes in need of repairs in gentrifying areas that are A all the way..

its a combination.

@Account Closed  well said.. although I am glad to say as a C student I think I ended up on the shinny side of the penny.