[Calc Review] Help me analyze this deal

2 Replies

Looks good for the most part, a few things though. 

1) The property value is not rising every year? Even if you don't care about appreciation, it's a good idea to see what it could be worth in the future (especially if your going to take it to a partner or private money lender). I usually grow my property at a 2% appreciation rate each year.

2) The COC return ROI is pretty low, 7.16%, along with the cash flow. If your goal is to meet a COC return ROI of at least 7% a year, that's fine.

3) I'm also a little skeptical on your rent estimate. Where is it located? Just make sure your being conservative. 

4) Your not estimating any repairs. It might need a new roof, paint, windows, HVAC, etc. If you don't fix it up, that could affect the rent. If you do fix it up, you could maybe get that rent depending on the location. 

5) Lastly, your also not accounting for monthly maintenance, management fee, CapEx, and vacancy. All that would probably make this a bad deal.

Caleb, Thanks for responding. The rental market in Williamsburg is strong. However becasue of the location and whats here tourism, the College of William & Mary, Good schools and commutable to Richmond or Norfolk/VA Beach the housing market values are real good so finding that deal is hard.

1. Yes I for some reason forgot to put that number in. 

2. Yes would like that to be hire and are looking some other properties

3. Rent I do believe that I can get that the lowest would definitely be 1100

4. Yes I need to add repairs in the estimate. I did put in $50 a month in there for our warranty of all the appliance / HVAC / Hotwater etc. 

5. My wife and I manage one we have now and would also manage this one ourselves

I know the seller and he needs to sell quick as he is moving to the west coast. The same unit on his street just sold for 155,000. I believe I can get this for close to 142000. 

The questions is this a good investment in the longterm. We just had a baby a month ago and my plan was to get one for her to help pay for college etc as time comes. Is this worth that??

Thanks for the advice!