Buying first SFH Rental Property

[Chris D.]

Hello BiggerPockets!

I have started searching around BiggerPockets the last few months, listening to the podcasts etc and would love for the knowledgeable folks here to review my first potential rental.

It is a 665 Sq ft SFH, 2 bedroom 1 bath with brand new roof and new furnace.

• Market Value $60,000.
• Rent would be $700 per month and can be filled in days (hot rental market).
• I have financing approved through a local bank with 15% down and $2000 fees required at closing @ a 4.75% rate on a 30 year.
• Taxes $1301 annually
• Insurance quote was $400

The property isn't on the market yet as it's being sold by a Realtor and he's giving other Realtors in his brokerage first shot at selling it before going onto the market.

My Realtor, that I trust, suggests that properties with 8% Cap rate and up go in days for full asking price in our market. I'd like to offer less than asking price, but honestly feel like negotiations will end close to the $60k.

I'm showing a 9.6% Cap Rate roughly with $500 per month maintenance. Cash on Cash return of 27%.

Running the numbers it seems like a good deal, what do you think?