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Updated over 5 years ago, 07/19/2019
Help me see if this is a deal
Can someone please help me evaluate this deal? its meeting the 1% rule easily and it seems like it should be a good deal but the way I am running the numbers it doesn't seem to make sense but not sure if I am running it right. I would like to be able to rent it out after, it is a bank owned property that will not qualify for financing but I have access to an equity line of credit at 6.5% Heres the deal
Sale price 40K
Taxes $2500/year
Insurance $1000/year
I like to set aside conservative numbers of 10% management fees, 10% vacancy, 10% cap ex
I am estimating about 2000 in closing costs and a 15000 reno budget.
It should rent for a minimum of $1000/month
Should I be analyzing this as a cash deal and the interest on the loan an additional operating expense or as a 100% financed deal? I would like to have it paid off in 10 years and maybe that is too aggressive for this deal?
Let me know if I am not factoring anything in or forgetting another option
Thank you!