@Justin Roberts , at first glance, this looks like a very scary deal. Depending on what your goals are, maybe you're OK with a monthly cash flow of only 7 bucks, but that's pretty razor thin. The least amount I'd be willing to take is $100, and even that's kind of low. In order to make this work, you need to get the purchase price and expenses down, while boosting your ARV.
How are you funding this deal? $2k in closing costs seems to be pretty low, but not unrealistic. Are you OK with leaving $21k in the deal? Your loan points and fees are 0, not unheard of but it is pretty rare. Who's your lender?
Have you compared rents in the area to ensure this isn't too low? Compared vacancy rates? Your capex and repairs might be a bit too low as well.
For the ARV - how did you get your comps?
Over all, this looks like a bad deal but it also depends on your goals. Are you just very anxious to buy your first property and willing to sacrifice profits? If so, then that's ok, just as long as you know what you're getting into. If not, then don't input numbers to make the deal work, make sure you are using reasonable ones so you don't shoot yourself in the foot.
Analyzing deals is not just a science, but also an art. Keep at it, the more you do the easier it will be. Feel free to reach out with any questions.
Thank you for the reply Nick! I am new to analyzing deals, and I too think that this looks like a bad deal. When playing with the calculator, I can get monthly cashflow to $300 if the purchase price is $90k instead of $109k, while putting the home on a 30 yr note instead of a 15. Assuming the other numbers are sound, this deal, then, looks pretty good. So, my question is, is it reasonable to make an offer on a property that is that much below asking price?
Definitely need to get into a 30 yr mortgage and get the price/rent ratio at 1% or greater. 7% for management is too low unless you are self managing. Best of luck.