Hello All,
I believe this is my first post on the biggerpockets forums. Been reading and learning about REI for a little less than a year now and finally about to close on my first deal. I'll put the numbers below and I'm open to people's input and look forward to having an open discussion about what I did wrong and/or right! The unit is a 4-plex fully rented out in Hammond LA. Great to start cash-flowing immediately but nervous about inheriting tenants. Unit is in a grade C type area, rents are only $550/unit for 2BR/1BA. First venture into property management, not sure what to expect on that front. Either way, I'm really excited to start this journey and hope that this can lead me to financial freedom and out of the rat race one day!
| Cost Assumptions |
| Financing Assumptions |
| Purchase Price | $115,000 |
| Downpayment |
| 25% |
| Land Value (25%) | $28,750 |
| Finance Amt |
| $86,250 |
| Building Value (75%) | $86,250 |
| Downpayment Amt |
| $28,750 |
| Improvements | $0 |
| Interest Rate |
| 5.125% |
| Closing Costs | $4,313 |
| Mortgage (Years) |
| 30 |
| Total Cost | $119,313 |
| Mortgage Payment |
| $470 |
|
|
|
|
| Cash Outlay |
| $33,063 |
|
|
| Monthly | Year 1 |
| Revenues |
|
|
|
|
| Rental Income |
|
| 2,200 | 26,400 |
| Vacancy/Loss Rate |
|
| 8.0% | 8.0% |
| Vacancy/Loss Value |
|
| (176) | (2,112) |
| Gross Income |
|
| 2,024 | 24,288 |
| Expenses |
|
|
|
|
| Property Taxes | Annual | 1,600 | 1,600 |
| Insurance | Annual | 1,800 | 1,800 |
| Maintenance & Repairs | Annual | 3,000 | 3,000 |
| Utilities | Annual | 500 | 500 |
| Advertising | Annual | 0 | 0 |
| Administrative | Annual | 0 | 0 |
| Variable Cost PropertyMgmnt | (% Income) | 10% | 2,429 |
| CF & ROI (Doing My Own PM) |
| Annual Cash Flow | $11,753 |
| Cash ROI | 35.55% |
| Total ROI | 39.31% |
