[Calc Review] Help me analyze this deal

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Hi, I'm a newbie looking for some guidance. I've been using the rental calculator to analyze deals I've found on the MLS. I've found a few that are already tenant occupied and I only analyze them if I see that the 1% or greater principle applies. So in this case it rents for 700/mo and the listed asking price was 70k. Once I fill in all of the fields, it barely cashflows. Am I missing something or does this really just highlight that the real cashflow is found when you solve a problem with a property, i.e.- forcing equity or rehabbing altogether?


Jim Halk

@James Halk Cash flow doesn't come from forcing appreciation through rehab. It comes from getting a great deal on a place whose rent(s) keep(s) up with the value of the house. For instance, a place with an $800-1200 rent can and often does cash flow way more than a place with an $1800 rent because you're likely paying way more for the $1800/mo property. That being said, forcing appreciation is great because then you're creating equity you can use to scale up.

I checked the tax rates, insurance it seems to be reasonable. Do not expect the home in this price range and rent carry positive cash flow anywhere in the US. This may be as high as a 1890 year old 1 bath home go in this economic cycle. 

Suggest a FHA lower down payment larger MF in a more active town with high paid jobs....