Are my basic assumptions about the numbers correct in Columbus?

[Carlos Castillo]

A 40k 3bd 2bth house in ohio has a mortgage of roughly 300 monthly with  20% down. Rent in the zip code of 43204 for this is on the low side 700 monthly.  The fee for property management, since Im out of state, is 100 month roughly. 
So...
$700

-300

-100

= $300 monthly?
Am I missing some big number here? Because this looks like great cash coming in. TOO good. It cant be right.

[Robert Ellis]

Originally posted by @Carlos Castillo:

A 40k 3bd 2bth house in ohio has a mortgage of roughly 300 monthly with  20% down. Rent in the zip code of 43204 for this is on the low side 700 monthly.  The fee for property management, since Im out of state, is 100 month roughly. 
So...
$700

-300

-100

= $300 monthly?
Am I missing some big number here? Because this looks like great cash coming in. TOO good. It cant be right.

Yah all the repairs and maintenance. in this area of columbus (43204) most of the homes are built before 1920. you are having all sorts of potential issues. wood windows, knob and tube wiring, plaster walls, old cast iron plumbing, etc. If it's only 40k one of the major repairs could take your cash flow away for over a year. ETC a roof is 8k for example. let's say you have to replace that year one. 8000/300 cash flow is 26 months of cash flow or over 2 years just to recoup that cost. So when we buy in these areas almost everything has to have been done or the ARV of the home has to be over 100k (only certain areas of 43204) to give us room to update some of these plus cosmetic updates.