All Forum Posts by: Vessi Kapoulian

Kevin, conservatively assuming 30% down payment, 8% property management fee, $100/mo insurance, 10% vacancy, 10% maintenance, and 10% capex reserves, the investment yields $60/mo cash flow. If the property condition is good, lower maintenance and capex reserves may be appropriate, thereby yielding $200+/mo in cash flow. It seems that there could be a good deal here purely based on the numbers (which alone do not always paint the most accurate picture but are a good starting point). 

I'd inquire about deferred maintenance particularly of major items such as roof, electrical, plumbing, HVAC, siding, which could add up and impact cash on cash return and pay back period. To the extent known or agent is able to disclose, I'd also inquire about the reason the current owner is selling after such a short period of time. 

Once under contract, you can diligence the property condition and should be in a better position to negotiate terms or walk away, if you do not like what you see.

I hope this helps.

Chad,

I also recommend to check out Dean Harris, Crestcore Realty. He has a Memphis-specific weekly podcast and reviews various Memphis zip codes periodically. He is also a BP member.