First Property Numbers Sanity Check

[Jayme Currie]

Hi everyone!

Preparing to start making offers on our first property but want to make sure we aren't missing anything in our analysis before moving forward. Please poke holes in our math.

Property Info: 

Single Family (2/1) located in High Point,NC. 

Funding:

Purchase Price =  $84K

 15% down ($12.6K) and financing the rest at 4%

Monthly PI = $340.87

Annual PI = $4,090.49

Estimating 1.5% in closing costs = $1,260 

Total invested = $13,860

Income: 

Property is currently tenant occupied at $850/month through the end of next year. Assuming 5% vacancy going forward total gross income = $9,690/year

Expenses:

We decided not to include repairs/capex in this estimate because we plan to maintain $10K in reserves for this property to cover expenses. Once we take funds out we will replenish before taking income from the property again. 

Property Taxes (based on historic) = $700/year

Insurance = $900/year

Lawn = $480/year

Management = $1,020/year

Total = $3,100

Return: 

Cash Flow = $9,690.00 - $4,090.49 - $3,100 = $2,499.51 or $208/month

CoC Return = $2,499.51/($1,260 + $12,600) = 18.03%

What do you think? Are we missing anything? Would you make an offer? 

Thank you!

[Joe Villeneuve]

Originally posted by @Jayme Currie:

 @Joe VilleneuveThanks for the feedback! Purchase price is based on listing price so yes we will be negotiating just wanted to run numbers based on paying full list to be conservative. Are you skeptical of the $200/month CF based on our calculations or something else?

 Not skeptical about the accuracy.  I just think that's a very low CF number