[Calc Review] Help me analyze this deal

3 Replies

If the numbers and info you putted are accurate, you have yourself a decent deal to pull the trigger on based on a cash flow standpoint, I have no idea regarding any appreciation or if the $5k Equity has s sufficient for you or not.

Hi James. 

Interest rate: 

Where did you get 4%? IF this is an investment property the interest rate is typically 1% higher than the current average, and it of course depends on your credit. 

Property Taxes:

Where did you get 5%? $400 in annual property taxes seems quite low, but of course it depends where this is. 

@James Burton oh, Midwest, you vex me with your prices. This place would be $750k+ in my town...but I digress.

  • Your closing costs look low. Average costs across the U.S. is $4k+, I'd confirm with the lender.
  • As @Jason Martinez noted, your interest rate looks low. Talk with a local credit union for the best rate. Might find 4.5% or better.
  • Repair cost of $3500 looks low based on the pictures, but again, I live in a very HCOL area.
  • Your insurance is probably high. I doubt it's more that $50/month. Check with the a local insurance agent.
  • I would bump your repairs and CapEx way up, probably double what you have. Typically, I recommend 15% of GSR combined, but on such an inexpensive property they tend to run at a higher percentage. Just because the rent is cheap doesn't make a new water heater any less expensive.

Lastly, do you have a lender lined up? Many banks don't want to lend on anything this inexpensive, it's not worth their time. Local lenders are your best bet as they should have products to accommodate the local market.