Help Analyzing Prospective Deal

[Johnathan Robinson]

I’ve got a prospective property in my sights with the following data included below. On first glance, it looks like a property I should pursue; however, I’m a newbie and probably should seek the counsel of the more wise BP community. Please let me know if you think I’m underestimating my analysis.

Here are my data points:

Asking Price $175,000

2 br/1 ba duplex in a decent part of town in Houston, TX

Rental comps range $950-$1,095/mo

Current tenants lease runs through December

Purchase Price: $175,000

ARV: Assuming the place is in decent condition, I don't plan to make any substantial improvements. So I assumed the ARV would be $175,000

Estimated Repair Cost: $2,500

Downpayment: 10%

Loan Interest Rate: 4.5%; pulled it out of the air. My credit is 750+

Loan Amortization: 30 years

Gross Rent: $2,190 ($1095 *2)

PMI: $65 estimated

Monthly Insurance: $65/mo estimated

Property Tax: $229/mo

No other fixed landlord-paid expenses (e.g., elec, water/sewer). Should I include something for garbage? I have no knowledge of how that works.

Vacancy (10%)

Repairs & Maintenance (5%)

CapEx (6%)

Management Fees (0%)- I’ll be learning from this property, but hope to handle management alone.

Future Assumptions: Ultra Conservative

Annual Income Growth: 1%

Annual PV Growth: 1%

Annual Expense Growth: 1%

This results in $573 in net cash flow per month, which sounds good. Let me know what you think.