Hey guys, my name is Jessyka Bailey and I'm new to BP. To be honest, I'm new to the idea of ever thinking that I could own a property in my life but after attending DJ Envy's seminar in December I know that I can do it. Probably a little different but other than skateboarding (yes, I do tricks) I have worked in sales my entire life. I take a lot of pride in being able to talk and communicate with people. Right now I'm living in Brooklyn and working as a server in the West Village and I've already told myself that after this serving job I'll never do it again. Honestly, the quick money is quite addicting and I don't want to end up doing it for the rest of my life. Not sure how detailed people get on these but I am lucky to have been able to positioned myself to have a lot of free time during the week to pursue skateboarding and continue to progress. So yeah, I work like 20 hours a week and do gigs modeling when they come along.
Anyways, I am trying to understand on how to see if a deal is good. I'm attending the Webinar on Wednesday but wanted to get a head start because I'm going to an open house tomorrow for fun. I just read this blog How Do I Know If a Property Is a Good Investment and I think I did the same math But something is off. I just wanted to get some insight into if I totally botched the math or what I'm missing or over compensating for.
So here it is.
Property
Buy $598,000 5 Beds 3 Baths 2,200 Sq. Ft.$272 / Sq. Ft.
Estimated ARV- $749,174 (This is estimated by finding the average between the neighboring houses)
Cost to repair-$100,000 (take a look at the property, I'm not sure something like this would cost)
Now hypothetically, I would like to us an FHA loan @ 3.5% to get this done.
$598,000 - 3.5% down = $20,930 + Closing Costs = $31,000 (out of pocket)
Would my next step be to take out a hard money loan for the $100,000 ? Fix it, Refinance or do I go to another bank for the $100,000.
Mortgage- $3514/month
Rent- First Floor 2BR $2000 Second Floor 3BR $2500 TOTAL- $4,500
Side Note: On the post the basement is called "rooms" so I'm assuming they don't follow the building permits to call them rooms. If possible I would like to make it into a 2BR but for the sake of this post and me having to go to work lets stick with this.
Insurance= $361/month
Property Taxes= $160/month
PM= $450/month (10%)
Repair Costs= $450/month (10%)
Cap Ex= $450/month (10%)
Vacancy= $225/month (5%)
Total= $2090 - Rent = Cashflow $2410
Monthly Cash Flow = $2410
Annual Cash Flow= $28,920
Cash on Cash Return = $28,920 / $131,000 = 00.22 or 22%
Is this right. Where did I go wrong. Send help, and please go easy on me.
Thank you for your time,
-JB
