I am brand new to BP, joined last night after listening to the webinar. I would really appreciate if someone can help me analyze this deal and tell me what I can change to make the numbers work. I got my RE license recently for my own purposes so I don’t have to pay the agent cost. Thank you
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@Josephine Ramesh , the main issue is that this probably isn't a viable candidate for a rental. You're way below the 1% rule, so it's almost impossible to get any cash flow when you have typical financing (25% down). A few things to keep in mind about how you're calculating your expenses:
- CapEx and Repars will probably equal out to 15% combined
- Your vacancy looks low. I figure 8%, but this is very market specific.
- Management will likely be 10-12% until you build up a portfolio and can negotiate a lower percentage.
- Typically, you'll need 25% down for an investment property. You may be able to find a local bank or CU that will do 20% for 1-4 units, though.
Thank you Jaysen. I will run the numbers again based on your input. I might take out the property management expense and handle it on my own to increase cash flow.