New Investor want to check numbers on investment

[Duncan Stafford]

Hi everyone,

This is my first post and I'm new to real estate investing. Having read several books I've been crunching the numbers on what has become our first real estate investment. Adding an ADU to our SFR and then renting out both units. The numbers I came up with her exceedingly good so wanted to check I had done them right.

Purchase price - $480,000 (Nov 2018)

Own money spent - $96,500 (combination of cash / loans but all paid off now)

Income: total rent - $4,800

Expenses:

Mortgage, taxes, insurance - $2,600

Vacancy - $150

Repairs - $100

CapEx - $237

Water & Gas & electric - $84 (percentage paid by me)

Property management - $330

Total - $3,501

Annual cash flow - $15,588

CoCROI - $15,588/$96,500 = 16.1%

Total ROI:

Current house value - $600,000 (conservative)

2% value increase per year

House value in 5 years - $662,448

Sales expenses - $38,122

Loan pay off - $426,673

Total invested - $96,500

Profit - $101,153

5 year cash flow - $77,940

ROI - $179,039/$96,500

=1.8559/5years

=37.1%

I haven't added in the mortgage cost for the 18 months we were living there whilst work was being done as this would have been an expense we would of paid anyway even if it wasn't an investment.

Let me know your thoughts and please highlight any errors.

Regards

Duncan