Help on Deal Analysis!!

[Nathan Lilly]

Hello fellow BP members, I have a deal that I would like extra eyeballs on. Purchase price $107,000 these are two separate properties buying as a package. Rent from property 1 is $750, rent from property 2 is $900. Expenses are $1530 a month for both properties. The terms are a 15 year amortization with a balloon payment due at the 61st month, which is the first month of the 6th year. With the full payment due in 5 years kinda worries me. These will be my first two properties and it will give me a way in the industry, but I also don't want to make a bad financial decision. What do you guys think? 

[Doug Shapiro]

Hi @Nathan Lilly,

The rent from both properties combined is $1,650 and the combined expenses are $1,530? Assuming that you're accounting for ALL expenses including vacancy, maintenance, CapEx, insurance, etc., then that is still a low return from the cash flow side of things. Unless you can do almost no down payment or you want to sell the properties for a profit, then I'd say pass on this one.