GOOD DEAL? Please TELL ME BEFORE I INVEST!
Okay location is in a small CITY!, however looking at the microeconomics and the city seems to be appreciating slowly per year. The vacansy rate is around 2-5% over the last 3 years. Here is the numbers.
Rooms: 6 bedrooms 2 bathrooms
Tenants:
3 tenants
Unoccupied rooms: None
Rent for tenants:
2825$/month = 941$ each
Average yearly Income: 34, 200
Property Listed Price: @$299,000
Offered Price: $290,000
EXPENSES
Taxes: $1722 per year = 200
Insurance: 200
City water 150
Lawn 160$
Estimate for Vacancies: 5% 142.5
Its actually 5.2%
Repair: 7% 170
Property Management (10%) 285-> She told me she can have a friend watch and care for the property for me
Mortgage: 5% down(14,500) at 2.3% for
1206(adjusted)
Expenses total: 2228.52$/month
Cash flow= 596.48
NOI: 7157.76
ROI = NOIx12/14,500 = 49%
Okay guys so Looks like my Cash flow and ROI is GREAT. Please confirm I did numbers right. The other thing is this will be an out of state purchase. Thirdly she told me she has an older couple friend to care for my real estate who lives in the area and is reliable.
I dont want to miss out on a deal since everytime I find one someone steals it from me!! Shouldd i trust her friend to watch over property.
Most Popular Reply
NOI does not include financing expense so you have some terminology wrong.
On the surface this looks good but there are things you haven't considered.
- Are you going to be able to get a 5% down loan for an investment property. Especially important in you are holding in an entity like an LLC.
- Is this being used as a rooming house? Do the tenants pay separately? Is this zoned for that and is it legal use?
- How about turnover costs
- Lease up cost when there is a vacancy
- licenses and permits
- reserves for capital expenses.
Just some things to think about.