Analyzing a property - New investor

[Toree Barnes]

Hi everyone ! I recently discovered Bigger Pockets and ever since I have not gone a day without being on the website! I am new to real estate and I am educating myself on finding good deals. I am analyzing a property that has a ROI of 47%... is this an incorrect number? I know Brandon looks for about 12% ROI.. THANK YOU

[Andrew Angerer]

Typically closing costs are 5.5% at a very minimum, yours should be much higher. Also, keep in mind that if you want to put that little cash down, you will need to get a FHA loan, which I believe requires you to live in it, this is not a big deal if you plan to do that, but that cuts out your income.

Also your monthly expenses should be roughly 50% of your income according to the 50% rule. 

Be sure to double check your repairs, 4000 is very minimal repairs and you really should try to find a property that has the possibility to value add.