Turnkey rental full cycle analysis

[Jesse Proett]

In 2018 I bought a turnkey rental house from Memphis. High cash flow and all that.

Purchase price $79,000 rented for $835

Money due at closing to acquire the deal was $23,374. This does not include the inspection cost I did prior to closing. Lets just say it was $100, I forget what it was.

So Im all in $23,474. Monthly mortgage was $485.81 and the rent after property management was $751.50. Now Im cash flowing $265.69. Not too bad.

A few months into it and the tenet fell into hard times and could not pay the rent. This went on until we had to evict them. The cashflow was about $1,100 the first year because of this.

With make ready costs and vacancy, the cash flow for the second year was about $1,450.

Ok, but now it is worth more and I agree to sell it for $85,000. Lender requires certain repairs that cost $2,250. My loan payoff is $58,446. Minus the 6% commission and I estimate getting $19,204 at closing.

Money into the deal $23,474. Money out after 2 years $21,704.

This is probably a great deal for someone that wants to hold on for a very long time.