First Deal Analysis - 35% CoC Return?!?!? Where did I go wrong?

[Chris Ganz]

First time posting so please forgive me if this is in the wrong place.

I have been analyzing some deals and wanted to have some of the more experienced folks look over my numbers to confirm my analysis. There is an 8-Unit Property listed for $295,000 in the Houston Area. In the listing the seller claims 71,880/year in gross rent and that it is currently leased out.

Rent Fee:	$5,990.00
Principle & Interest:	$1,127.00
Monthly Taxes:	$658.00
Monthly Insurance:	$344.00
Maintenance:	$958.40	~16% Gross Rent
Vacancy:	$479.20	= ~8% of Rent
Property Managment:	$0.00
Capital Expense	$299.50	= ~5% Gross Rent
Utilities:	$0.00
Exterior Care	$100.00	Lawn Care

Total Monthly Cash Flow:

$2,023.90

Estimated Annual Cash Flow	$24,286.80
Loan Amount	$295,000.00
Down Payment	$59,000.00
Closing Cost (3% of Loan)	$7,080.00
Seller Concessions	$0.00
Repair Costs	$1,350.00
Utility & Other Costs during Vacancy	$800.00

Total Cash Invested:

$68,230.00

Cash on Cash Return:

35.60%

With a CoC Return so high I am skeptical about my numbers. This investment seems like a no-brainier. Please let me know if you see any errors in my analysis.

[Deshawn Lewis]

@Chris Ganz

Well, you need to account for PM, even if you are going to manage the property at least put it in your numbers so you will have an idea how it would look if you don't want to PM the property anymore. Also, I think you will have some utility expenses as well, Even if its as small as a hallway light or storage room light etc.. you have no cap ex expense as well, thats the biggest thing that you are missing. just for example CapEx will cover big expense over time like a roof, ac unit, etc.. you NEED to budget these things before it happens..other than that it looks good