First investment property: (CT)

[Aaron Ram]

Hi there,

I just joined this website and it seems to have a wealth of info. Here are the details for the property I am looking to invest in and my financial status.

Property Type: Single family
Bedrooms: 4 bedrooms Baths: 1 and 1 half baths
Buy price: 180,000
Downpayment: 20% (36,000)
Taxes: 6391
home owners insurance: 500-600

Mortgage calculator: $1,306.00 (30 year conventional)
(at 4.5% interest rate | this calculator included HO insurance)

I rounded the mortgage with other expenses to 1,500
so that would give me a net of 18,000 / yr
Am i missing any expenses or do you think I rounded to low or high?

My Credit: 750
Income: 130,000
Rental income for this property: $3,000 (firm)

I would like to get other opinions on how good of an investment this is. If I did move forward, it would be my first investment. At the moment I am not concerned with selling back the property. I would just like to concentrate on cash flow. So with respect to that being my main objective, what do you guys think?

My short term goal would be to buy 3 of these between now and the end of next year. producing a cash flow of 40,000+

Very new to this so please let me hear it.

Appreciate any feedback or assitance.

Thank you,

Aaron

[Mitch Kronowit]

:welcome:

First off, will somebody give you a 4.5% interest rate on an NOO (non-owner occupied) investment property? Assuming you have a lender that will give you those terms with 20% down, then I calculate your PITI (principal, interest, taxes, & insurance) to be $730 + $532 + $45 = $1307, just like you got. If you manage this rental yourself and save the typical 5%-10% property management fee, then this property will throw off a little over $1,500/month in free cash flow if it rents for $3,000 (amazing since a 4/2 in SoCal barely rents for that much but costs over a half million dollars to buy).

Now out of that free cash-flow, you're going to have to calculate repair costs, capital improvements (new roof, new HVAC, etc.), and possible vacancies (mortgage payments going out, no rent coming in). Many here will say your monthly expenses will be $1,500/month (the infamous 50% Rule), but that includes taxes and insurance, so you would still net over $700/month in cash-flow every month. And the 50% Rule is based more on cheaper multi-family units, like apartment, than premium single-family residences, like the one you're describing.

In all, it sounds like a great deal. Is this in Connecticut?

Sorry if I messed anything up, it's late and I'm tired. Why the heck am I still up? :zzz: