[Calc Review] Help me analyze this deal - Montgomery County, MD

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I am looking to start my real estate investment career this year. My strategy is to buy-and-hold rental units for at least 7 - 10 years.

Most properties I am looking into are in Gaithersburg, Germantown, Rockville (Montgomery County) area of Maryland. Almost all properties in this area are Condos/Townhomes and Single Family. Very rare will you find duplex or multi-family. This summer older town homes in nicer areas (good schools) went for 320 - 340k (3 bd/2.5 ba); newer town homes go for around 375k. 

Looking at the report, the numbers don't add up. What would be a good price point for this unit? The seller is asking for 325k. 

I can't really speak to what the right price point would be, as I'm not familiar with the area. Obviously, you never want to have negative cash flow. Also, 4% for vacancy is probably a bit low. At 4%, you wouldn't even cover 1 months rent after a year. You'd want at least 1 month in the bank to cover turnover, if not more. Also, I'm not sure how you arrived at the down payment of $9K - it seems low for a $300K loan on a rental property. Also be sure to add in property management unless you plan to self manage (10%). Without knowing more about the property itself and the ARV, I can't really add much more. I'd keep looking.

Hi Daniella, 

A realtor friend brought this deal to me. It is yet to go in the market and hence I may have first dibs. 

Since this will be my first home purchase I am looking to put only 3% down and finance the rest from traditional lender.

As-is the home will sell for $325k. After fixing it up it should sell comfortably for around $350-360k.

Low 400s is my sweet spot in Rockville and Silver Spring. And 4% vacancy would be high for the area. I average 2% and I dont put much effort in trying to lower that number.

Originally posted by @Russell Brazil :

Low 400s is my sweet spot in Rockville and Silver Spring. And 4% vacancy would be high for the area. I average 2% and I dont put much effort in trying to lower that number.

 Thank you. I will try these numbers for my upcoming deals.