@Melba Chambers your expenses are a little low especially capex. Even if everything is new things have to be replaced. Examples roof $7500 /25 life span / 12 months in a year =$25 per month, Floors 1200 sf @ $6 sf = $7200 / 8 year life span /12 =$75 per month. Two items exceed your $65 budget. You have appliance,hot water heater,hvac,painting,cabinets, etc. I use 23% for vacancy,repairs and capex. Looks like a good deal anyway just not as much cash flow you expected. You pull out $18k and get around $100 per month.
@Tim Herman Thank you very much
@Tim Herman That's a nice way to put it.. just make each category 8%. Has anyone else found good success with this 23/24% on the 3 items in the North East?
@Melba Chambers I'm new to this site and have tried looking at other's posts for advice. And I must admit, this is the first one that I like!
I would pull the trigger IF:
1. I felt comphy with the area (at that price point I wonder if it's difficult to find good tenants)
2. I had the 100k in cash, this way I wasn't choking on a mortgage if there are delays, etc.
3. Was very confident I could get a loan on the terms you stated.
Question, what are the laws on non-paying evictions? As evictions and damage to the home would be my biggest concern. Also, tenant pays 100% utilities? That would be good as you wouldn't need to pay water and heat for a non paying tenant BUT what about landscaping. Would you get a fine if the lawn was uncared for for 3 months or so?