Need help with first Deal Analysis

[Casey Mcgoff]

I've never done deal analysis before and I am very, very new to real estate. I am not considering buying this property, or any other property, for a year or so. However, this is a real property and I wanted to see if the numbers worked out. Please advise!! Thanks BP!

P.S. I would live in one of the units to qualify for FHA loan at 3.5% down and 4.5% interest rates...That's how it works, right? (for calculations sake pretend I don't live here, though)

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The house costs $200,000

I put $7,000 down and take a mortgage for $193,000 at 4.5% interest rate.

At 30 Years Fixed this is $977.90/month

The three units together bring in $4,470/month. (In reality these units are actually already rented out)

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Using the 50% rule for a quick glance,

$4,470 x 50% = $2,235 for expenses and $2,235 to pay the mortgage

$2,235 - $977.90 = $1,257.10 (cash flow)

$1,257.10 / 3 units = $419.03 cash flow / unit

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When I plugged this into the Rental Property Calculator I used these parameters -->

Property Taxes: $7,000

Points/Lender Charges: $0

ARV: $0 (no renovations planned or needed)

Electricity & Heat: $0 (Tenant Responsibility)

Water: $100 (guess)

Trash: $100 (guess)

Property Insurance: $150 (guess)

Vacancy Rate: 5% (guess)

Repairs & Maintenance: 5%

Capital Expenditures: 5%

Management: 10%

Future Assumptions: 2% (For all three)

The Rental Property Calculator gave me expenses of around $3,000/m and cash flow of around $1,200/m, which was around what I got with the 50% rule.

What am I missing? What would you do different? Thoughts? The property has had renters for a long time so I am assuming it is in livable condition with no serious structural/cleanliness issues.

Thanks again, BP.

Casey