@Ashley Nichols have you run a capex budget on the property. Unlikely that $47 will cover all the expenses. Say you have new flooring the day you buy it. Look at the warranty for commercial and most are 10 years. That is the lifetime. Say you have 1000 sf of flooring. My area it is $6 sf to replace. $6000/10 year lifespan/12 months in a year=$50 per month for 1 item in a capex budget. If the floors are 5 years old and you don't want to come out of pocket you need to budget $100 per month. Still need reserves for roof, appliances, hot water heater, hvac, bath and kitchen remodel.etc.
Unlikely insurance is $25 per month and taxes will go up as you improve the property. Don't know if you can get a cash out refi for 3%.
@Tim Herman thank you for your response!
I just calculated 5% for cap ex because that's what I've seen most others I follow do.
The insurance rate I found on Zillow. (I figured it was accurate because I own a SF rental about twice as big and the insurance is only $49/month).
I wasn't sure what rate to put in for the refi so I just used 3%. How do you recommend I find a more accurate rate?
-Thanks : )
@Ashley Nichols call a mortgage broker and see what they are quoting. 6 months from now might be different, For insurance I would call an independent insurance broker and get a quote. Different locals have different rates. Depends on how far you are away from a fire hydrant. GIGO(garbage In garbage out). The more accurate your inputs the better the outcome.
@Tim Herman thank you, this was helpful.