Townhouse Rental in Central Florida

[Robert E.]

Good morning and happy Saturday, Bigger Pockets gang!

I am still learning, and running test properties through the calculator, developing my business plan, and practicing my pitch for when I found my first potential rental property... Which I think may have fallen in my lap.  Story time...

My parents moved down after they retired, and moved into a townhouse just north of Walt Disney World.  It's a 3/2.5, ~1800 square feet, built in 2011, kept in pristine condition. We bought it when it was built, and I lived there after college (Dad and i installed crown molding, shadow-boxes on the walls, painted, installed overhead storage in the garage, brand new high-end appliances this year, etc).  I moved out and bought a new place with my wife early this year.  We were all under the impression this would be their forever home.  Turns out, they don't like stairs, so they are buying a new build just down the road. 

The HOA takes care of any exterior maintenance like roofing, for example, among several other things (basic cable/internet, water, landscaping, gate, pool, gym, clubhouse, etc). But, this takes up quite a bit of space in the Expense column ($330). With all of that being said, the rental property calculator factors in Repairs and CapEx (including many other entries). As it's a townhome, and the HOA covers most big-ticket items except water heater and air conditioning, would it be necessary to still budget out $100-$150 for both repairs and capex each month?

I've reached out to a few rental agents who have confirmed their rent price includes the HOA. Rent's going anywhere between $1900 to $2050, according to Zillow.com. According to the calculators on the site, this destroys my cash flow. The only way to get it to where i want it ($200 cash flow, with 8% COCROI), is if I lower the budgeted funds on Repairs or CapEx.

I don't want to pass up this opportunity, since the property is so close to Disney, and these places rent out and re-sell EXTREMELY easily, but I may not achieve the amount of cash flow that I want/need to secure investors.  I'd need about $50,000 down, and I only have about a quarter of that of my own.  

I'm sure there are some creative financing strategies.  I was thinking maybe they cash-out refinance the property, leaving 20% equity, pull out the funds so they can use that to buy the new house, and then re-assign the mortgage and title of property to me.  That way, they still get plenty of money, they don't need to pay full listing commission for a Realtor, and my wife and I get the townhome as a rental without needing to secure other sources of funds.   Not sure how viable that is, but just wanted to throw it out there for consideration.

At any rate, thank you so much for sticking with me thus far.  If you've read my entire novel, you deserve a high five!!

Thanks so much,

Robert