analyzing my first few properties (help)

[Brian Heaver]

ok... I am analyzing my first property and I wld like some one to help and tell me if I did this correct.

total cost of project

110k (offer) + 2000 (closing)+ 10000 repair =. 122,000. ARV around 130k

quick break down

1) asking 125k

2) I want to offer 110k

3)down payment of 22k (20%)

4) loan amnt 88,000

5) mortgage  $817 ( including taxes and insurance)

6) cost basis

.    vacancy $47

.   mortgage $817

.   cap ex $200

.   maint $40

.    prop mngmnt  90

total  expenses $1194

rental income 900 (Tenant occupied until mar2023) - 1194=  -294 in the red

thanks for helping a newbie and ill take any advice on what to do different or if I missed something or... whatever else. 

[Scott E.]

If you're putting $22,000 into the deal, think about your target return on that money.

Calculating returns on rentals gets a bit abstract when you consider appreciation, principal pay down, and tax benefits. But I like to aim for a minimum of 8% cash-on-cash return when looking it solely my cash flow compared to capital deployed.

$22,000 x 0.08 = $1,760.

$1,760 / 12 = $146.67

What this means for me is that if this deal cannot cash flow about $146 per month now or in the near future, then I'd find another deal.