My first attempt at the "4 square method" What am I doing wrong

[Michael Shenouda]

Hello all,

So I'm attempting to learn by using the 4 square method on properties I see online to 

A. See if it's a good investment

B. Compare my results to the numbers provided by whichever site I'm looking at.

I included a screenshot of my makeshift excel sheet I'm using...

Property is in PA.

Monthly rent is included in the listing. 

Taxes I'm using the listings numbers

Insurance I'm using the listings numbers

Utilities paid by tennant

Vacancy 5%

Repairs I didn't know how to estimate

Property Management 10% 

Down Payment 25%

The listing is showing a cash flow of $1,050 / year, which equates to $87.50 per month. My numbers show a negative cash flow... are my assumptions severely off? I'm not understanding.

[Cheryl Packham]

At first glance, it looks like you may be doubling the taxes and insurance.  

Purchase price = 109,900

Down payment = 27,475 

Total Loan = 82,425

30-year fixed at 8% is $605 per month for principal and interest.  (I hope you can get a better rate than that, just for figures here.

You have a mortgage payment listed at $744, which I am guessing you included the taxes and insurance into your mortgage payment as that is the amount you would pay to the bank for them to escrow those items. 

I hope that helps.