Deal analysis gut check
Hey BP!
I’ve finally saved up enough to have a shot at getting in the door in the Denver real estate market. I found a place in the SW corner near Ken Caryl.
I know this property won’t cash flow on day 1 but it should save me some cash compared to my current rent. Here’s the numbers:
Purchase price $480k
Down payment: 5%
5 bed 3 bath
So my girlfriend in will occupy the master bedroom and keep 1 other bedroom in the basement as a guest room. The other 3 rooms are large and should rent around $700 each easily.
I've estimated my monthly expenses to include mortgage, PMI, taxes, insurance, vacancy, and reserves at $2470/mo
Our current rent is $1200 for so assuming we rent all 3 rooms at 700 that would put us at negative $370 CF (2470-(3(700))) which is rent savings of $830.
I’m sure some of you are cringing at negative cash flow but I’m hoping some people who understand the competition in the Denver market give their input. Any tips or opinions would be great!
Also houses in that neighborhood with similar floor plans have been barely updated and are selling at $550k! Could be a nice secondary exit plan. Lastly the whole house should rent for $2500 including property management so we should be free to move out after the first 2 years.