Looking to buy my first rental Rental property

[Marcus Johnson]

Hello everyone,

I'm not really new to BP's forum, but I'm interested in getting some feedback about my situation. I am looking for a rental property in the Richfield or Bloomington, Minnesota for a single family 1,000 to 1,800 squarefoot home, at least a 3/1/1 home if not better. I've called around to some PM companies and gotten some information regarding the types of homes and vacancy rates of rentals in these cities. My price range is anywhere up to 120k, with 15% DP. I'm prequalified by two different banks that have quoted me an interest rate of 5.25%.

I have run the numbers of a $110,000 home on a spreadsheet and here are the numbers. I'm just doing an estimation on a story and a half that I found.

Offer price $110,000

DP $16,500

IR 5.25%

Monthly property Ins $52

Monthly PMI $100

Monthly property taxes $150

Vacancy rate 2%

Closing costs 1% to 2%

Inspection $300

Initital repairs $2,000

Montly maintenance fees $50

Cap rate 8.75%

Cash on cash 1.4%

Monthly NOI

So this how does this sound? Any suggestions on beating out cash buyers? What type of realtor to choose? How to close the deal quickly? Any other suggestions?