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Updated about 18 years ago,
What if it cash flows when purchased at FMV?
I have an opportunity to buy a 1472 sq. ft. 2 family at $99,900. Rent in the neighborhood is $700 per unit ($1400 per building). Comps have several absolutley identical properties on the same street each at $105,500. I have not seen the inside of the property yet, but I believe it to be in good condition. If it cash flows as shown below is it a good idea to buy at or near FMV? 100% financing per below is another hurdle I'll figure out if I decide to do this. Did I mention there are two of these side-by-side? I'm a newbie so I'm reluctant to take both. Thanks for your thoughts.
High financing estimate because I like to pad things - $110,000 @ 8%= $807
Taxes ($1500/12)=$125
Insurance ($1000/12)=$83
10% Vacancy=$140
10% Repairs/maintenance=$140
Rental income ($1400) minus expenses ($1295) = $105 positive flow
Is this too good to be true?