Calc Review - Thoughts about insurance?

Question

Did my first analysis with an attempt at inputting actual expenses versus using 50% rule. This property has slab problems, hence the high repair budget. List at 185K, breakeven from a cashflow perspective around 150K, requires getting to around $115K for CF of around $100/month. About 140 days on the market. I think I get killed on the property taxes and insurance here (just did a sample quote through USAA). Poor Cash on Cash return.

Any additional feedback?

House listing: https://www.redfin.com/TX/New-Braunfels/1514-Devin-Dr-78130/home/33465564

Analysis: https://dealcheck.io/s/-M5dZ6c...

Assumptions:

Vacancy: 5%
CapEx: 5%
Maintenance: 6%
Property Management: 8%

Any additional feedback?

House listing: https://www.redfin.com/TX/New-Braunfels/1514-Devin-Dr-78130/home/33465564

Analysis:  https://dealcheck.io/s/-M5dZ6c...Assumptions:

• Vacancy: 5%
• CapEx: 5%
• Maintenance: 6%
• Property Management: 8%

Lillian Burke · Answer

It's a really beautiful house- which can be dangerous.

Assuming you actually want to deal with a single family home, you could put in a low-ball offer such as 105K, to make sure it works, but it probably won't be accepted. You could check to see how much they bought it for- few people will willingly sell for less than they paid, even if it makes financial sense.

On your estimates: capex looks low. Vacancy probably low- insurance probably high- USAA tends to be high, though I really like working with them. I think that selling costs more likely to be higher.

if you have plenty of liquidity to be able to tolerate a few months without rent, it is fine, but your costs and expenses are very close here.

I personally would not want to go through the aggravation and work for such thin margins- but that's just me.