@Jared Bartman , this is pushing the 2% rule, so likely to cash flow well. As you included in your analysis, looks like appreciation will be minimal, which is fine as long as you go in with your eyes open and it fits your goals.
As far as your analysis:
- Closing costs look high, especially if you're using a HML. They make their money on interest rate and points, not closing fees.
- Why are you planning to wait a full year to refi, especially if you have a loan out at 12%?
- I'd expect Vacancy closer to 8% on MFR. This is super local, though.
- Repairs and CapEx might be high. I usually use 15% combined, but if you know there are deferred maintenance or CapEx that will come up soon, better to be conservative.
- $150 might be a bit high for insurance. Talk with a local insurance agent.
- You've left off Management (10%). Always include Management in your underwriting, even if you plan to self-manage at first.
- What about water/sewer, lawn care, snow removal, pest control, and admin/professional fees?
A few questions about your refinancing:
- You are below 20% equity, which most lenders won't do. Your max loan will probably be $96k, assuming your ARV is accurate.
- What are you doing a 20-year loan? You'll, obviously cash flow better with a 30-year.
- That rate is very high, especially for a 20-year mortgage. I expect you'll be able to find something closer to 4%.
- Refi fees look very high. Does the $6500 include points? Gosh, I hope not if they're charging you 5% interest.