Feedback for Newbie Rental Property Analysis
Hello BP Forums!
I've just begun learning about real estate investing and have gotten interested in buy/hold strategies. To build knowledge in my local market I've challenged myself to analyze one property a day. Would love to get the communities constructive feedback on the following property and analysis. What do you guys think? Most of the numbers I've gotten are from reading books or internet research.
I've set my criteria to 3 BR 1+ bath SFR's that I can purchase with >$200 cash flow and 12% ROI.
The property in the photos was listed at ~187K. I believe it has a market value closer to 170K based on similar sold properties in the area. I would plan to make my money going in my offering ~136K or -20% of MV (may get laughed at but hey never know until you ask and then can negotiate). I'd make a 20% down payment.
Total cost of purchase would include hold costs (3 month rent), an inspection and closing costs (3.5% of purchase price).
The property looks rent ready so zero repair costs.
I anticipate it will rent for $1.5k. Expenses include 5% vacancy, 5% maintenance, 11% property management ( I wont hire initially but need to budget it in), insurance and 5% CapEX.
Property principle and interest is based on a 30 yr 4% mortgage payment on the amount financed ~108K.