Is this enough cash flow?

[Adam Varone]

I became friendly with a builder who is willing to sell me his newly built condo at a “discounted rate”. He said he will be listing the property at 375k but will give it to me for 360k. My plan is to offer 370k with 10k seller assist. I was able to get into a GREAT program with the bank the details are below. 

5% Down: 18509(No PMI)

Closing Cost: 21000(this includes ~$4500 in points)

Interest Rate: %2.5

10k grant towards down payment and 7500 grant towards closing cost.(I know sounds too good to be true)

The property has a 10 year tax abatement since it is new construction in Philadelphia therefore I only pay about 16/month in taxes.

Final monthly payment: 1550

Estimated Rent 1800

Cash to Close: 10k

~30% yearly return. Thoughts??

[Jaron Walling]

Adam, if you haven't already I'd encourage you search and read as much as you can in these forums. The search bar should be your best friend. The BP forums are a gold mine. That being said the numbers you provided don't play out as a cash-flow rental if that's the strategy. Sure the rent covers the mortgage but you're going to come out of pocket on other expenses. 

Expenses to factor in are vacancy, CapEx (probably quite low), maintenance/repairs, PM, and insurance. Another thing to consider is new construction. As you read and research you'll find most new construction doesn't play out for cash-flow. It's true and I see it everyday in my market. The shiny new SFH and condos don't get rented out. They get sold to the sucker with the most money. Cheers.